Dealmaker: Berkadia Closes $188M in Multifamily Sales
Berkadia, New York, closed $187.8 million in California multifamily property sales.
Berkadia Senior Managing Director Dean Zander and Managing Director Joe Leon represented AvalonBay, Arlington, Va., when it sold Eaves by Avalon in Tustin, Calif. to Raintree Partners, Laguna Niguel, Calif. The 628-unit property traded for $164 million–$260,000 per unit–the largest sale price for a single-asset market-rate sale in Orange County in the past five years.
Leon called the 1972-vintage Eaves by Avalon a value-add opportunity. “With planned interior upgrades, the buyer will achieve a significant premium over the current rental rates and still remain at rates below the newer competitive set nearby,” he said.
Zander noted that the immediate neighborhood bordering Irvine and Tustin Ranch, calif. is considered an affordable alternative to Irvine and said Tustin’s recent market rent increased more than 6 percent while maintaining one of Orange County’s lowest vacancy rates at 3.7 percent.
“With high barriers to entry in the immediate area, the rents and occupancy rate are only expected to increase further as the market struggles to meet the housing needs of the expanding population,” he said.
In West Covina, Calif., Berkadia Managing Director Robin Ossenbeck represented DCP Lark Ellen Apartments when it sold Windwood Apartments to Lark Ellen Investor for $23.8 million, which reflects a per-unit price of $250,172.
Ossenbeck said Lark Ellen Investor, Culver City, Calif., plans major renovations to increase property’s value. “This was an attractive investment opportunity for the buyer due to the high potential to create value post-renovation,” she said. “The marketing effort yielded 26 tours and 13 offers. Coupled with an active market and an even more active buyer pool, the seller was able to receive a full cash payout for the property.”
The 116-unit Windwood Apartments was 98 percent occupied at closing. West Covina apartment vacancy averaged 4.4 percent in late 2015.
