Affordable housing investor sells Pasadena complex for $223M

Los Angeles / By Isabella Farr

313-unit HUD-subsidized complex built in 2003

An affordable housing complex in Pasadena has traded hands for $223 million.

The 313-unit Kings Villages at 1141 North Fair Oaks Avenue sold this month for around $712,000 per unit, according to CBRE’s Dean Zander and Stewart Weston, who brokered the deal. The buyer was not disclosed.

Records show the complex was previously owned by Fresno County-based Affordable Housing Development Corporation. AHDC, run by founder Peter Herzog, bought the site for $25 million in 2000 and last renovated the property in 2003, according to the firm’s website.

The Kings Villages complex receives a 100 percent state welfare real estate tax exemption, according to CBRE marketing materials. The complex also has a contract with the U.S. Department of Housing and Urban Development, which provides assistance for tenants. The contract expires in October 2035.

The deal is one of the priciest transactions in recent months in Pasadena, where a number of deals have involved affordable or “workforce housing” projects in the area. Workforce housing generally involves some government aid on financing in exchange for keeping rents below market rates for new tenants who earn between 80 and 120 percent of the median income.

​In June, Waterford Property Company bought two complexes totaling 513 units for $335 million–about $653,000 per unit for conversion to workforce housing.

​Pasadena still lags on affordable housing, like much of California. In January, the city of 140,000 was assigned a target of 9,400 affordable units by 2029 under the state of California’s affordable housing goals.