Both the buyer and the seller were represented by Compass’ Kenny Stevens.
The seller was a family that built and owned the properties. It was the first time the buildings sold.
“There are several beneficiaries, and they got tired of managing properties and felt like it was the time,” Stevens said of the decision to sell.
The portfolio’s location made it a desirable investment.
“It’s a fantastic location, close to the Grove, and in 90048 properties rarely trade,” Stevens said. “Most of the properties that have traded have less than 10 units. It is very rare to get a large portfolio of properties in this location.”
All 60 units, Stevens added, are within a block of each other.
He said Christina Development will make substantial renovations to the property. Rents in the building, he said, are at least 40% below market value.
But the sale wasn’t all smooth sailing.
“There were some challenges in closing a deal during the coronavirus,” Stevens said. “Lenders, inspection, basically everything.
The fact that this deal closed with no renegotiation I think really says a lot about the buyer and the seller.”
In 2019, nearly $9.5 billion was spent on apartment building sales in L.A., according to data from Newmark Knight Frank. That’s a 574% increase in the past 10 years.
The last few months saw a number of high-profile multifamily sales in Central Los Angeles.
That includes the 606-unit Sofia Los Angeles in Westlake, which sold for $272.5 million; the 192-unit Collective Apartments, which sold for $48.3 million; and an equity stake in the 346-unit The Pearl on Wilshire, which valued the property at nearly $171 million.
Also during that period, the 240-unit Wakaba in Little Tokyo sold for $115.8 million and the 169-unit Preston Miracle Mile sold for $86.8 million.
Brokers say it’s too early to tell how the coronavirus outbreak will affect multifamily sales. Due to L.A.’s housing shortage, there is still demand for multifamily assets, but financing and viewing properties may pose some difficulties.
Los Angeles Business Journal
By: Hannah Madans