The Serravella Apartments complex in the Hollywood area of
Los Angeles has just come under new ownership, courtesy of
a transaction valued at approximately $86.3 million. Security
Properties Inc. sold the 298-unit rental community to Prometheus
Real Estate Group, about two years after having acquired it
in a partnership with GMAC Institutional Advisors for nearly
$64.3 million.
Carrying
an address of 1710 N. Fuller Ave., Serravella sits at the
base of the Hollywood Hills near the legendary Grauman's Chinese
Theater and the Hollywood Walk of Fame. The 217,000-square-foot
mid-rise property was originally developed in 1986 and occupies
nearly two acres just off the 101 Freeway.
Security Properties' decision to sell Serravella was based
on its corporate strategy of holding assets for two to three
years. Given the company's approximately $20 million profit
from the sale--it invested only a couple of million in the
property after buying it--the timing was right.
"There
has been a lot of press that the real estate market in general
is down, however, for triple-A locations like this, there
is still tremendous interest," Lonnie Nadal, director
of acquisitions for Security Properties, told CPN today.
According
to multi-family sales and research firm Hendricks & Partners,
which marketed Serravella on behalf of Security Properties,
investor interest in the apartment complex was very strong.
"We had offers from the expected pension funds, REITs
and private families," Dean Zander, a partner with Hendricks,
shared with CPN. Serravella has maintained s strong occupancy
levels over the last several years, and rents continue to
rise as demand increases. "In the Hollywood apartment
market, specifically, there are close to 5,000 Class A multi-family
units in the planning or development stages between Western
and Fairfax, representing a combined $10 billion investment.
Serravella is one of the best locations." New owner Prometheus,
which relied on the representation of real estate investment
brokerage company Marcus & Millichap in the transaction,
will submit Serravella to a major upgrade to include the addition
of a business center, and will also change the complex's name
to The Vantage at Hollywood Hills.
Headquartered
in San Mateo, Calif., Prometheus also owns assets in Northern
California, as well as in Oregon, Utah and Washington. The
company's portfolio encompasses over 16,000 multi-family units,
with several thousand currently in the development phase or
undergoing renovation. Seattle-based Security Properties manages
and owns multi-family real estate, and has sponsored the purchase
or development of more than 420 properties across the United
States over the last 38 years.
