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1/19/17
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Vista Investment Group recently closed two SoCal multifamily buys in deals that totaled $27.5 mil. The purchases consist of an 80-unit apartment community in San Diego and a 50-unit apartment complex in Los Angeles.
In the larger deal, Vista paid $19 mil for La Mesa Palms, an 80-unit ($238k/unit) multifamily community at 4300 Echo Court in La Mesa, 12 miles east of Downtown San Diego. The transaction marks the Los Angeles-based real estate investment firm’s entry into the San Diego market. The seller was a private family investor that had owned the property for more than 40 years.
The garden-style apartment complex consists of 20 four-plex buildings with spacious two- and three-bedroom units that average 1.1k sf in size. The property was 92.5% occupied at the time of closing.
“San Diego is one of the most fundamentally sound multifamily markets in the nation and we have been waiting for the right opportunity to enter the market,” said Vista President Jonathan Barach. “The La Mesa/Spring Valley submarket is one of the more affordable rental submarkets in the region with great school districts, good freeway and mass transit options, and easy access to major employment centers. We will continue to seek well-located multifamily assets with strong upside potential in the $10 - $50 mil range as we look to establish scale in San Diego.”
Vista will implement a multimillion capital improvement program that will begin with upgrading the buildings’ exteriors and grounds, as well as the interior renovation of vacant units. Unit upgrades will include quartz countertops, vinyl wood plank flooring, and stainless steel appliances. Other units will be renovated as turnover permits, according to Barach.
HFF’s Hunter Combs represented both parties in the transaction. The purchase was financed with a $13.05 mil, 30-year loan from Chase Commercial Mortgage Lending and arranged by HFF’s Marc Schillinger and Zach Koucos.
In the other transaction, Vista paid roughly $8.5 mil for The Ashmont, a five-story, 50-unit ($170k/unit) reinforced brick apartment building at 908 S. Hobart Blvd in Los Angeles’ Koreatown District. Built in 1928, the building boasts a mix of single and one-bedroom units, a garden and a large laundry facility. The transaction also included an adjacent 9k sf, fully entitled land parcel that is currently being used as a 33-car gated parking lot for the apartment complex.
Vista plans to give the complex a total facelift to improve its curb appeal and rent potential. The renovations will include upgrades to major building systems, exterior and common areas, landscaping, and unit interiors as turnover allows. Unit improvements will include refinished and polished original hardwood floors, exposed brick accent walls, new shaker cabinets, quartz countertops, stainless steel appliances, and modern bathroom fixtures.
The building was approximately 90% occupied at the time of closing. The Ashmont adds to Vista’s existing Koreatown portfolio of five multifamily properties totaling 240 units. Vista also owns 375 units in neighborhoods immediately surrounding Koreatown.
Colliers International Executive Vice President Kitty Wallace represented the seller, a private long-term owner, in the transaction. Andrew Kirsh, co-founder and head of the real estate department at Los Angeles-based law firm Sklar Kirsh LLP led the legal team representing Vista in the two transactions.
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