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October 16, 2021
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Prime Residential Buys 454 Res Units in Hermosa Beach for $275 Mil


In a major SoCal multifamily trade, Prime Residential acquired two adjacent multifamily assets located two blocks from the beach in Hermosa Beach for a combined price tag of $275 mil. The assets are Playa Pacifica, with 285 units, and The Gallery, with 169 units, which sold for $162.5 mil ($570k/unit) and $112.5 mil ($666k/unit) respectively.

Playa Pacifica
Playa Pacifica
The assets were sold by an institutional seller who acquired the properties in 2006 for $133 mil. According to Kevin Green, IPA senior managing director who was part of the team that brokered the deal, this sale represents the acquisition of 24% of the entire apartment stock in Hermosa Beach.

Located under a mile from the famous Hermosa Beach Pier, the properties’ location gives residents access to some of the world’s largest technology, entertainment, aerospace and defense companies in the South Bay and Silicon Beach. Popular neighborhood attractions include The Strand, Greenbelt Park, beachfront nightlife, restaurants, live music, high-end boutique retailers, and a coastline famous for surfing, volleyball, and sunsets.

Playa Pacifica was built in 1972 on four acres and partially renovated in 2015 and 2016. The unit mix has eight floor plans of studio and one- and two-bedroom layouts. The average apartment size is 590 sf. Renovated units have stainless steel appliances, quartz countertops, and in-home washer and dryers. Community amenities include two solar-heated swimming pools, a fitness center, business center and clubhouse, spa, and an outdoor lounge with a barbecue area.

Constructed in 1971 and partially renovated in 2003 and 2004, The Gallery is located on two acres. It has four floorplans across a mix of studios, one-bedroom, one-bedroom-plus-loft, and two-bedroom layouts. Units have hardwood flooring, granite countertops, walk-in closets, and crown moldings. The average unit size is 831 sf. Community amenities include a gated entrance, reserved covering parking, a swimming pool, fitness center, spa, and sauna.

Green, along with IPA colleagues Greg Harris and Joseph Grabiec, represented the seller and procured the buyer in the transaction. Harris notes that the purchase gives the buyer a sizable footprint in a coastal location, a compelling value-add opportunity and the ability to operate the properties as a single entity.

“Hermosa Beach is one of the most affluent communities on the West Coast, and there have been no institutional-sized multifamily properties built here in the last 50 years,” Grabiec commented. “The average annual household income in Hermosa Beach is over $190k and more than 55% of the population lives in renter-occupied housing, which creates compelling demand for apartment homes.”

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