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7/15/15
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Los Angeles,-based Trion Properties has sold two multifamily properties in San Diego County for $7.63 mil and has acquired another apartment property in San Diego County for $9.65 mil.
One of the properties Trion sold was Casa Verde Apartments in La Mesa, which is located at 7629-33 Normal Ave and contains 21 units. In 2012 Trion paid $1.9 mil, or $90.5k/unit for the property, which was built in 1958.
Casa Verde Apartments is comprised of two two-story buildings with a unit mix of 20 two-bedroom/one-bath apartments and one one-bedroom/one-bath unit. Features include a gated entry and 26 on-site parking spaces.
Upon acquisition Trion vacated the majority of the building, which had suffered from high collection loss from non-payers and problematic tenants. Trion renovated the interiors with flooring, kitchen cabinetry and countertops, bathroom vanities and showers, and new fixtures throughout. The curb appeal was enhanced with modern landscaping and new paint and tile designs.
The property sold in May 2015 for $3.58 mil ($170k/unit). Corey McHenry and Peter Scepanovic from Colliers were the brokers back in 2012 and handled the recent sale for Trion.
Trion’s other recent sale was for Southwinds Apartments, located at 909 Sunshine Ave in El Cajon. Southwinds contains 22 units in two two-story buildings built in 1977.
In 2013, Trion bought this property for $2.35 mil, or $106.8k/unit. The business plan for Southwinds was similar to La Mesa, with an extensive interior and exterior renovation to turn around the property and improve the cash flow.
Trion then sold the property in May, 2015 for $3.74 mil, or $170k/unit. All of the units are two-bedroom/one-bath with either an upstairs balcony or a downstairs large enclosed patio/yard. The property has a gated entry and 34 on-site parking spaces.
Corey McHenry and Peter Scepanovic from Colliers were the brokers on the original purchase by Trion represented Trion in this sale as well. The broker representing the buyer was Dave Plutner of DP Properties.
Commenting on the sales, Max Sharkansky, Principal of Trion, said, "These two dispositions bring successful conclusions to two investments where our strategy of buying value-add properties and then turning them around worked to perfection, yielding huge returns to our investors. The IRR on the two deals combined was very high, 59.31%, with an equity multiple of 2.87."
Trion’s recent acquisition is for Park Grove, a 98-unit, garden-style apartment complex located at 3635 College Ave in San Diego. Trion paid $9.65 mil, or $98.5k/unit for the asset.
Park Grove was built in 1963 in the Mid-City submarket of San Diego, approximately two miles south of San Diego State University. The property has significant deferred maintenance and below market rents, due to decades of mismanagement. Each of the complex's buildings has two floors with one- and two-bedroom units.
Trion plans to heavily improve the community by investing significant capital and implementing an aggressive lease-up program. This includes a high-end interior renovation complemented by a strategic exterior renovation, similar to the renovations in Southwinds and Casa Verde. The company will begin by completely transforming the property’s façade and curb appeal to attract potential tenants.
As leases expire, Trion will enhance the unit interiors to turn Park Grove into a higher quality apartment asset. The property was financed with bridge debt at 75% of total cost by Continental Funding Group.
Noted Sharkansky, "Park Grove represents an opportunity to increase value through strategic upgrades and a full property rebranding. With a heavy renovation plan we will bring the property up to 2015 standards. This will include a gut renovation of the interiors, a full common area reset that includes adding amenities such as a recreation and BBQ area, and repairing what’s underneath the hood by replacing plumbing, electrical, and HVAC systems.”
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