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4/04/24
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In a notable multifamily trade in Los Angeles, a three-story, 120-unit apartment community in the city’s historic La Fayette Park neighborhood sold for $43.44 mil, or $362k/unit. The property, consisting of a 91k sf building on a 43k sf lot, was acquired by the Housing Authority of the City of Los Angeles (HACLA). The seller was California Landmark Group.
Built in 1971 and extensively remodeled in 2017, the property is located on a wide, tree-lined street at 349 S. La Fayette Place, east of Hoover St and south of 3rd St. It has 120 subterranean parking spots with third-party billing for EV charging stations.
Currently, 85% of the units are fully renovated, and their quality exceeds the competitive market set. With high-end finishes and fixtures, kitchens featuring stainless steel appliances, in-suite washers and dryers, hardwood floors with carpeting in the bedrooms, and mini-split AC and heaters, the quality of the building is top of the submarket.
Capital improvements undertaken in the last six years include a new roof, updated plumbing and boiler, a resurfaced and modernized pool, a built-in barbeque area, a redesigned fitness center, EV charging stations, and elevator modernizations. All units include 100-amp electrical panels and new plumbing to accommodate the installation of in-unit washers and dryers.
Kitty Wallace and Kalli Knight with Colliers represented both parties in the transaction. The seller had below-market assumable agency debt; however, the buyer paid cash to preserve the right to create and maintain affordable housing. The property was purchased with the intent of promoting and advancing workforce and affordable housing initiatives. Since the transaction involved a public agency buyer, the sale was exempt from the ULA Transfer Tax.
“With a shortage of over 500,000 housing units in the City of Los Angeles, mounting obstacles to housing development including the implementation of the ULA tax, CEQA, and elevated costs of construction and debt; finding innovative solutions to alleviate high rent burdens for workforce residents is paramount,” said Wallace. “This sale exemplifies a creative option to preserve and create affordable workforce housing.”
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