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5/14/19
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A joint venture between IDEAL Capital Group and Aegon Real Assets US has acquired Novella Redondo, a 105-unit apartment property in Redondo Beach. IDEAL Capital Group is a Clovis, CA-based real estate investment firm based in Clovis. Aegon Real Assets US is a division of Aegon NV. The price was not disclosed.
Located at 616 Esplanade St, the 82.2k sf property experienced extensive water damage during October 2018 storms, causing significant water intrusion which eventually resulted in 80% vacancy. The building, which had undergone a previous $16 mil renovation, received a full roof replacement and common area waterproofing upgrades following the storm.
CBRE’s Dean Zander, Stewart Weston, and John Montakab represented the seller, Stockbridge Capital Group.
“This was a unique situation and opportunity for the buyer since it provides them with a blank canvas to create a premier residential community in Redondo Beach,” said Zander. “Our marketing efforts yielded over 40 tours and more than 20 offers from a variety of investors including institutions, sponsored groups, family offices and private individuals.”
He added, “The tremendous location and nearly-vacated shell gave investors an opportunity to create the ultimate boutique coastal apartment community in an amazing beach locale with almost no deliveries in the past 35 years, and only one development project in the pipeline.”
Novella Redondo is just steps from the beach and offers ocean views from approximately 40% of the units. Common areas include a swimming pool, outdoor fireplace, pool-side fitness center, two laundry facilities, WIFI throughout, dog wash station and subterranean parking. The buyer plans extensive renovations and upgrades to unit interiors and common areas to create a truly ‘best-in=class’ community in one of the most desirable locations in Southern California.
Located in the South Bay, residents have access to the area’s top employment in industries such as aerospace, technology, global communications, medicine, military, and business applications. The region also hosts American headquarters for Honda, as well as key divisions or headquarters for Raytheon, Lockheed Martin, Computer Sciences Corporation, Boeing, Chevron, British Petroleum, Mattel, Northrop Grumman, and Xerox and many others.
Novella Redondo is located in a high-barrier-to-entry market, as Redondo Beach has not had any market-rate multifamily construction since 1973, with only one 115-unit property currently in the development pipeline. The Los Angeles multifamily market has been extraordinarily dynamic over the past year, with net absorption reflecting sustained high levels of demand, according to a CBRE research report. For the year ending in Q3 2018, absorption increased 46.1 percent to reach 14,182 units. Multifamily asset acquisitions reached $2.8 billion in Q3 2018 (up 13.1 percent year over year), the strongest quarter since Q4 2016.
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