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2/07/20
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A 40-unit apartment community situated on about 1.47 acres of land in Santa Monica was acquired by an unnamed affordable housing developer in a recent transaction valued at $13.7 mil $342.5k/unit. It was sold by a family trust.
Located at 2033-2101 Virginia Ave, the property had been owned by the seller’s family since the late 1970s. It features a mix of 24 one-bedroom units and 16 two-bedroom units averaging about 800 sf in size. The property also includes an adjacent 6.7k sf vacant lot for potential development or additional amenity space. The apartment community is a five-minute walk to Santa Monica Community College and across the street from Virginia Avenue Park, which is home to the Pico Branch Library, as well as a weekly farmers’ market.
Laurie Lustig-Bower and Kadie Presley Wilson of CBRE represented the seller in the deal. The buyer, a non-profit affordable housing developer that restores, builds, and manages affordable housing, was repped by Guillermo Urias of Keller Williams Pacific Estates.
“While the property traded at a sub-1 percent cap rate, the driving force behind the buyer’s acquisition was to provide affordable housing units to the City of Santa Monica,” said Lustig-Bower.
Added Presley Wilson, “Given the upside and the opportunity to purchase such a large piece of land in Santa Monica, there was substantial interest from buyers. Even with aggressive pricing guidance, we garnered about 10 offers. It was a very competitive process.”
The buyer obtained financing from the city and plans to significantly improve the building and common area spaces with the intent of keeping the units affordable.
U.S. multifamily acquisitions rose by 4.4% last year to $184 bil—the highest volume since Real Capital Analytics began tracking the market in 2005, according to CBRE’s year-end multifamily research report. CBRE Research expects sustained enthusiasm and capital for multifamily investment through 2020, along with deep pools of debt capital to finance buying activity. This landscape is likely to bring reluctant sellers to the market and keep investment activity at very high levels.
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