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1/29/15
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Santa Monica-based Joda Investments recently acquired Ocean Plaza Apartments, a 44-unit residential property in Long Beach. The property, located at at 633 E. 1st St within the city’s East Village Arts District in Downtown, traded for $6.25 mil ($142k/unit) in an off-market transaction.
Situated on just over one-half acre, the property consists of three, two-story buildings with a pool in its center courtyard and offers 18 one-bedroom units and 26 studio units. Built in 1956, the property recently underwent light renovations, including remodeled kitchens. Joda Investments, which owns seven other properties in Long Beach, plans to make additional capital improvements and will consider redeveloping the property after a five-year hold.
Robert Stepp, principal with Stepp Commercial, represented the seller, Torrance-based Luna Bear Investments. Stepp also advised the buyer on securing a five-year fixed Freddie Mac loan at 3.3 percent. The property closed at a 5.55 percent cap rate.
“We deal-matched this property with the buyer and advised on a strategy to add value in the near-term by making an investment to bring rents up to market rates, as well as in the long-term once the low-interest loan matured,” said Stepp. “Per zoning allowances, the asset can be redeveloped to accommodate up to 95 units and five stories, which is an attractive opportunity to maximize the return on investment.”
Ocean Plaza Apartments is just one block from Ocean Blvd, within the East Village Arts District, one of the hottest areas of Downtown Long Beach. This area is undergoing a growing demand for housing as it provides an eclectic mix of retail, dining, entertainment, and art. The property will also see the long-term benefit of being near The Current at Shoreline Gateway, a 17-story mixed-use project that will include 223-apartment units and retail, which is also within the East Village and is set to open in early 2016.
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