BY: Lisa Brown

A 197-unit multifamily property in the Inland Empire recently sold to Tailwind Investment Group, an Orange County-based real estate investment firm, for $53.6 million. The Vue, located at 1660 W. Kendall Dr. in San Bernardino, was built in 1988 and is situated on 11.94 acres near California State University, San Bernardino.

The property is also near the 210, 215 and 15 freeways, allowing access to Los Angeles County, the greater Inland Empire region and a variety of nearby entertainment centers. Residents are within walking distance to amenities including Campus Crossroads Shopping Center and The Shops at University Park.

“The Vue has benefited from the phenomenal rent growth over the last couple of years, consistent with overall rent growth in the Inland Empire, which has increased 22 percent since the fourth quarter of 2019,” says CBRE’s Stewart Weston.

CBRE’s Dean Zander and Weston represented the sellers, Dalan Management and VM Management, in the transaction.

​“With minimal new apartment supply coupled with an abundance of jobs in the warehousing, manufacturing, distribution and logistics centers nearby, investors are demonstrating a strong and growing preference for well-located Inland Empire apartment buildings,” said Zander. “Tailwind plans to perform unit interior and common area upgrades to better position The Vue in this highly desirable submarket.”

Los Angeles – Aug. 5, 2021 – CBRE announced the sale of Vintage at SLO, a 105-unit multifamily community in San Luis Obispo, Calif., to California-based real estate investment firm IDEAL Capital Group for $51 million.  
​
Stew Weston, Dean Zander and Jef Henderson represented the seller, a joint venture between Newport Beach, Calif.-based real estate investment and development firm Capstone Commercial Properties and local developer and general contractor, Robbins | Reed. 

Construction of Vintage at SLO was completed in 2021 on a 5.1-acre site at 3554 Ranch  House Road. The 91,749 square-foot property is comprised of seven three-story buildings with  an average unit size of 874 square-feet. Community amenities include a resort-style pool, fitness center, dog washing station and 161 parking spaces. 

“The developer delivered a true best-in-class community, as evidenced by the rapid leasing  velocity, lack of concessions and increase in rental rates throughout the lease-up period,” said  Zander. 

Added Kevin Conway, Managing Director at IDEAL Capital Group, “As a firm located in the heart of California’s Central Valley, we recognize the long-term value growth and high barriers to entry of Central Coast real estate. Vintage at SLO is an irreplaceable, high-quality asset located adjacent to technology companies, hospitals and Cal Poly San Luis Obispo.” 

The property is three miles from Cal Poly San Luis Obispo, a public university with an annual enrollment of approximately 22,000 students. 

​“We’re pleased to have developed and sold this one-of-a-kind community,” said Ricky Nelson, Vice President of Capstone Commercial Properties. “This project furthers our goal of developing unique apartment communities, investing in the Central Coast and expanding our apartment portfolio in the western U.S.” 

By Hannah Madans

Multifamily sales slowed during the Covid-19 pandemic, but the market began to rebound by late last year.
 
During the previous five years, according to CBRE Group Inc. Executive Vice President Dean Zander, the multi-family market in Los Angeles County usually saw about 500 sales a year of properties with 20 or more units.
 
But in 2020, Zander said, the number of sales fell by nearly half.
 
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Renters Drawn to Units Not Near Crowded City Core During Coronavirus

By Jacquelyn Ryan  |  CoStar News

A local family that owned five suburban apartment complexes for decades has almost 100 reasons to show why rentals outside city centers are popular in the pandemic. In short, that's how many offers the sale generated.
 
Raintree Partners bought the properties in greater Los Angeles for $142 million after a bidding war for the portfolio that underscores spiking demand for rentals in less crowded suburbs.
 
The real estate investment company based in Dana Point, California, bought the properties in Camarillo, Canoga Park, Glendale and Hollywood from a local family that has owned them for an average of 34 years, according to CBRE Group, which brokered the deal.
 
Strong apartment demand has helped offset some of the worst effects of the COVID-19 pandemic on Los Angeles real estate, CBRE's Dean Zander, who represented the seller, told CoStar News. Apartments in L.A. suburbs such as Glendale in the San Gabriel Valley and Camarillo in Ventura County 50 miles northwest of downtown show better financial performance than properties in some of L.A.'s densely populated and expensive neighborhoods.
 
"The pandemic is having a ripple effect on both the office and multifamily markets because people just aren't inclined now to go into central business districts to live, work and play," Zander said. "People used to define quality of life as access to entertainment, nightlife and jobs in the urban core. We've seen a switch now to larger garden-style units, away from luxury high-rises. It's much more about the need for space, distance and quality of life now, and suburban areas are really benefiting more than ever before."

The properties received the almost 100 offers to buy either the whole portfolio or individual properties before selling to Raintree for an average cost per unit of about $257,713, CBRE said. That's well below the Los Angeles average asking price of $372,000 a unit, according to CoStar.
 
The sale and accompanying bidding war reflects the growing popularity of multifamily properties outside of urban metropolitan centers as renters seek more space and less expensive units on the outskirts of major cities during the pandemic, Zander said.

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​Raintree Partners closed on the acquisition of the LAVVA Portfolio (Los Angeles & Ventura Value Add Portfolio) in a $142 mil transaction. The sale, consisting of five properties totaling 551 units in Canoga Park, Camarillo, Glendale and Hollywood, worked out to an average price of $257.7k per unit.

​The properties were sold by a West Coast-based family investment entity that acquired four of the assets between 1970 and 1985, and the fifth property in 2009. The seller’s average property ownership tenure is 35 years.
 
The properties have been very well-maintained and upgraded over the years, but there is significant value-add potential. The buyer plans to take advantage of this opportunity through capital investment improvements. The properties in the portfolio are:
• Mountain View - 106 units in Camarillo, built in 1979
• Canyon Drive Manor - 137 units in Hollywood, built in 1973
• Perigee - 200 units in Canoga Park, built in 1985
• Imperial Manor - 64 units in Canoga Park, built in 1964
• Imperial Crest - 44 units, in Glendale, built in 1962
 
“The continued high demand for rental housing in Los Angeles has helped mitigate some of the negative aspects the COVID-19 pandemic has had on the local economy,” said Zander. “Despite an uptick in vacancies and some collection challenges, occupancy rates are still near historical highs, while rents appear to be holding up and showing signs of improving. Suburban areas, in particular, continue to outperform most urban locations.”
 
Added Weston, “Marketing the properties during the pandemic presented several challenges such as scheduling and conducting the many live and virtual tours for each property, as well as navigating the various ballot measures that could have materially impacted the success of the renovation plan. True value-add offerings continue to be highly sought by investors. Renovations ranging from minor cosmetic changes to major building upgrades allow investors to take advantage of strong rent growth.”
 
“This acquisition presents Raintree the opportunity to substantially increase our presence in east Ventura County as well as the Hollywood area and the San Fernando Valley,” said Mathew Barbiasz, Vice President of Acquisitions for Raintree. “With a host of well-paying jobs and entertainment options in each of these markets, the properties are well positioned for future growth.”

​SAN DIEGO — San Francisco-based Prime Residential has purchased Agave Ridge, a multifamily property located in San Diego’s Kearny Mesa neighborhood. Los Angeles-based Goldrich & Kest sold the property for $107 million.
 
Located at 7901 Harmarsh St., the 368,575-square-foot property features 369 townhome-style units in a mix of two- and three-bedroom layouts, with an average size of 1,000 square feet. On-site amenities include playgrounds, swimming pools and a fitness center. The property was originally built in 1959.
 
Kevin Mulhern, Allen Chitayat, Stew Weston, Dean Zander and John Montakab of CBRE represented the seller, while the buyer was self-represented in the deal.

Agave Ridge, a 369-unit townhome community in San Diego’s Kearny Mesa neighborhood, was acquired by San Francisco-based Prime Residential in a transaction worth $107 mil ($290k/unit). The asset was sold by Goldrich & Kest, out of Los Angeles.​

By Hannah Madans

By Hannah Madans

LARGEST MULIFAMILY DEAL SINCE 2006

Westwood-based Aragon Holdings has sold a portfolio of 36 apartment properties for $1.85 billion to Norfolk, Va.-based Harbor Group International.

The deal, spanning 36 properties and encompassing 13,243 units, is one of the biggest ever for an apartment portfolio.

The sale was announced Jan. 15.

“It’s monumental,” said Larison Clark, founder, chairman and chief executive of Aragon Holdings. “The largest multifamily transaction since 2016 and the fifth-largest ever. That’s a big deal.”

Clark, who founded Aragon Holdings as a private real estate investment and fund management company in 2008, said the time was right to make the deal.

“It’s the top of the market, and the only players that are buying these days have to be value-add and have to be able to improve this property somehow to make the property work,” Clark said.

The portfolio of properties stretches across several Sun Belt states, from Florida to Arizona. None are in California.

“The properties within this portfolio are in strong population growth markets with good employment drivers and overall good economic tailwinds,” Yisroel Berg, director of multifamily and managing director at Harbor Group, said in an email.

“The portfolio contains an attractive mix of markets where HGI already owns property in addition to new target markets for expansion,” Berg added.

The deal is part of Aragon Holdings’ sale of its entire $2 billion apartment portfolio. The company had sold a portion of its holdings prior to the Harbor Group transaction.

Clark said Aragon Holdings’ first batch of properties had mortgages coming due so the company sold them last year while seeking a buyer for the remaining portion of its portfolio.

Aragon Holdings said the suburban two- and three-story properties in the portfolio average 350 units each. Most are located near employment and transportation centers.

Harbor Group’s Berg said the company, “plans to invest a minimum of $90 million into the portfolio for a capital improvement and enhancement plan, equating to more than $6,000 per unit.”

Multifamily move

Dean Zander, an executive vice president at CBRE Group Inc., said the deal reflects the heightened demand for multifamily properties nationwide.

“We’re definitely still in an environment where multifamily is leading the pack as far as desirability from investors,” he said.

“(Aragon has been) in an acquisition mode since the middle of the 2000s and opportunistically looked around and saw they could refinance or sell at pretty attractive levels and let someone else take the properties to the next level,” Zander added. “It was well timed for them, and Harbor will do great with them.”

Newmark Knight Frank represented Aragon Holdings and helped secure debt financing for Harbor Group in the sale.

​NorthMarq Capital represented the seller for debt assumptions and defeasance. Meridian Capital Group advised the buyer.

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