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9/11/23
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Advanced Real Estate closed on a $96 mil res buy in Huntington Beach. The company bought a 264-unit ($363.6k/unit) property formerly known as Citron House, located at 7701 Warner Ave, just west of Beach Blvd.
The property, situated two miles from the Bella Terra Mall and close to the beach, will be rebranded as “Surf House.” Advanced has budgeted $7 mil to transform the asset into one of the most desirable properties in the area.
This method of purchasing assets, adding value through renovations and quality management, then holding long-term, has been a successful approach for Advanced for over four decades.
“Very few large properties trade in Orange County, especially in a coastal city like Huntington Beach” said Advanced CEO, Rick Julian. “The barriers to entry and cost to replace are so high, that it would be impossible to duplicate this low-density asset.”
According to Advanced, the property will be given an exterior facelift with new windows, balcony upgrades, paint, pool area overhaul (including the addition of large cabanas), new signage, and drive-entry enhancements. The interiors will be modernized with new cabinetry, countertops, flooring, fixtures, and a contemporary paint-scheme.
The renovations will be completed by Advanced’s in-house renovation Company, R3 Construction. Property management will be handled by their in-house management company, Advanced Management Company (AMC).
In the transaction, Advanced assumed an approximately $53 mil, Freddie Mac loan, which has a remaining term of approximately 1.5 years and bears interest at 4.22%. “We plan to complete as much of the renovation as possible while the existing loan is in place. The plan is to refinance with a larger loan in 2025 and use the excess proceeds to purchase more assets,” stated Julian.
This is the second property acquisition from the current Advanced Fund 21-2, which also purchased the Edison Apartments in downtown Long Beach on March 31st, 2023. The Edison is a 12-story former high-rise office building that was converted to luxury apartments in 2016.
The sale was brokered by Geoff Boler, Johnathan Merhaut and Eugene Chong from the Newport Beach office of Eastdil Secured.
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