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5/17/23
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Archway Equities has acquired The Paseos at Montclair North, a 385-unit multifamily community in the Inland Empire city of Montclair, for $150 mil ($389.6k/unit). We’re told this is the largest multifamily transaction in Southern California so far this year.
Paseos at Montclair North is located at 4914 Olive St at the Inland Empire’s eastern gateway to Los Angeles’s San Gabriel Valley. Encompassing nearly two full city blocks, the garden style community features a unit-mix of studio, one-, two- and three-bedroom Santa Barbara inspired townhomes built around a central linear park with concert amphitheater.
The property boasts a best-in-class amenity set including two resort-style pool areas with spas and cabanas, fitness facility with children’s entertainment suite, yoga room, conference center, and entertainment lounge. It was 97% leased at closing.
The Paseos’ location offers immediate proximity to the rapidly growing Inland Empire economy and prominent Los Angeles employment hubs. Nearby to Interstates 10 and 210, residents are a 60-minute commute to more than 6.5 million jobs.
In addition, the property is within walking distance of the Montclair Transitcenter, an intermodal transit center providing bus and train service throughout the region. It also will be the future home of the eastern terminus to the Los Angeles Metro Rail “L” Line serving downtown Los Angeles when completed in 2028. In addition, the property neighbors Claremont McKenna College, ranked as one of the top 10 liberal arts universities in the country, according to U.S. News & World Report.
While well maintained, 100% of the units have not been significantly updated since the property was developed in 2014. Archway plans to add designer touches to the unit interiors, create a co-working space and reimagine the amenity areas.
The property was sold by 4914 Olive Street Properties LLC, who was repped by JLL in the transaction. Archway assumed the accretive in place Agency loan with five years remaining on the term. For Archway, which has more than $1 bil in commercial real estate assets under management, including 5,000 apartment units across the Sunbelt, The Paseos represents the firm’s first multifamily investment in California.
“Somewhere along the way, cap rates between the Sunbelt and coastal markets inverted and select pockets of Southern California should now provide more attractive risk-adjusted returns in the current environment,” said Archway President Sean Moghavem. “We are still very bullish long term on multifamily in the Sunbelt because of its favorable business climate, low cost of living and continued job and population growth. Having said that, we continue to see aggressive pricing that’s not factoring in short-term headwinds such as supply, rising property taxes and insurance costs We’ll always look to grow our Sunbelt portfolio but are also actively seeking opportunities in the Inland Empire, Orange County and San Diego.
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