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May 24, 2019
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West Covina Res Property Bought by NY-Based Entity in $34 Mil Transaction


An affiliate of Abacus Capital Group LLC purchased Atrium Apartments, a 138-unit multifamily property in West Covina, for $33.9 mil ($245.7k/unit). It was the New York-based investment firm’s first purchase in Southern California.

Located at 1829 E Workman Ave, Atrium Apartments features mostly two- and three-bedroom apartments, averaging more than 1k sf and some of the largest units in the competitive set. The property, which also includes three swimming pools, BBQ areas, a business and a fitness center, has averaged less than 4% vacancy since 2016.

CBRE’s Dean Zander, Stewart Weston, and John Montakab represented the seller, MG Properties Group, a San Diego-based apartment owner and operator with a portfolio of 60 properties throughout the western U.S.

“This is a significant value-add opportunity through the continuation of an enhanced interior and common-area renovation program. It received a lot of attention from investors,” said Weston. “It translates into significant room for a new owner to realize an upside in future returns.”

Added Zander, “The Atrium is in an excellent San Gabriel Valley location, which is a submarket with an extremely high barrier to entry. We sold the property to the owner 10 years ago. They executed on an excellent value-add program, and the new ownership plans to continue their path and make new common area improvements.”

Earlier this year, the team represented a partnership associated with Landmark Properties in Sherman Oaks in the purchase of another West Covina multifamily complex for $18.8 mil, signifying the continued demand for investments in the area. The lack of new supply being introduced, coupled with strong demand has buoyed rents and kept occupancies high, according to CBRE research. Only one conventional market-rate property, consisting of 450 units has been built in the West Covina/Covina submarket since 1990, without any new projects planned.

“The San Gabriel Valley is high on many investor’s radar as a very attractive location, with terrific access to jobs, retail and transportation, and without any supply concerns due to the numerous barriers-to-entry and lack of available land,” Zander continued.

Added Montakab, “Institutional and private investors alike are seeking to create greater returns on value-add opportunities, especially in well-located markets that can almost guarantee an upside. We see many private investors becoming more sophisticated, paying much closer attention to the importance of such metrics as rate of return. This well-located property speaks to all that, as it has built-in upside while providing a stable, current cashflow.”

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