|
|
|
|
8/08/14
|
Los Angeles-based Decron Properties Corp has acquired Village Crossing, a 440-unit garden-style, multifamily apartment community on a 22-acre site in Chino Hills, for $82.25 mil ($187/sf). The asset was sold by Invesco Real Estate.
Decron, which owns and manages 5,155 multifamily apartment units throughout California with another 460 units under development, will invest an additional $9.2 mil – or $21k per unit -- on substantial renovations to the community to transition it from a “Class B” to “Class A” asset. After renovations are completed, the average rents at Village Crossing will range between $1,350 and $1,750 a month, which conforms with the three times rent/income multiple, for young families with an annual household income between $50,000 and $65,000.
“Young families are being priced out of the major, urban metropolitan centers, and they are not looking for nor can afford to buy a home,” said David J. Nagel, President and CEO of Decron Properties Corp. “They want a quality rental that gives them certain levels of security and comfort, and ultimately luxury at a price point they can afford.”
According to a recent study by the UCLA Ziman Center for Real Estate, Los Angeles is the most unaffordable rental market in the United States. According to the report, 54% of renters in the Greater Los Angeles area spend at least half of their income on rent, which falls into what UCLA refers as “severe rent burden.”
“Everyone is talking about the Millennials and the changes they’re making to the urban, downtown areas,” Nagel added. “But there are plenty of young families that also need quality housing and good schools, and can’t afford or don’t want to be downtown. We’re seeing this not only in Los Angeles, but in markets all over the West Coast – from San Diego to San Francisco to Seattle. This is an underserved demographic, and we’re catering to them.”
Decron’s Improvements to Village Crossing will include completely renovated kitchens with granite countertops, wood-like vinyl plank flooring, modern lighting, stainless steel appliances, new hardware and fixtures, and in-unit washers and dryers. The community’s three pool areas will be remodeled to include fire pits, resort-quality outdoor lounge furniture, and BBQ grills. Decron also intends to repurpose underutilized space to create a start-of-the-art, two-story clubhouse, with a 1.5k sf fitness center and 1k sf WiFi lounge and game room. Interior unit finishes and common area amenity package will match or exceed its competitors, including the newly constructed apartment projects in the area, according to Decron.
Village Crossing represents Decron’s third investment over the last two year in 1980s-era apartment buildings with this type of business plan. In 2012, Decron acquired a 397-unit apartment project in Simi Valley for $70 mil; in 2013, Decron acquired a similar 370-unit project in Moorpark for $84.4 mil. These investments demonstrate a focus on acquiring real estate in well-located suburban areas, near major employment areas, with strong school districts, where Decron can still offer rents at a three-times rent income multiple based on the local demographic.
Decron Properties represented itself in the acquisition, while Ryan Fitzpatrick and Sean Deasy of HFF repped the seller.
|
|
 Return to the Archive page
|
|
|
|
|
|
Printer-friendly Version
Email an Associate
