Former Halfway House Sells in $3M Competition

LOS ANGELES – An Ontario, CA buyer beat out several competing offers with a high bid of $2.7 million to take ownership of a recently renovated 13-unit apartment complex that had once served as a neighborhood halfway house.

Bentley Richards paid about $100,000 below seller Landfair LLC’s $2.8 million asking price for the two-story 522 Landfair Ave. property, Adrienne Herman, with CB Richard Ellis’ Team Lustig-Bower, tells GlobeSt.com.

“The building was, at one point, a halfway house but didn’t fit into the neighborhood so the owner tore the building down to the studs and redid everything.” says Herman, adding that renovation work on the structure was completed last October. The property’s high cap rate of more than 7%, coupled with the building’s high rents of between $1,200 and $2,000 for its eight studios and one and two bedrooms, made it an appealing investment, she says.

“The risk was that the rents are very high for the area, but assuming that the rents are going to hold up, he’ll probably see some pretty decent cash flow from that building,” notes Herman, who represented the seller in the transaction. The buyer was assisted by Alex Garcia, with Marcus and Millichap’s local office.