LAGUNA BEACH, CA-GlobeSt.com has learned exclusively that locally based Dornin Investment Group has acquired two Western US properties: Tenaya Quail East, a three-building, 54,112-square-foot distressed office, retail, flex and industrial commercial property in Las Vegas, and the Kelsey Apartments, a new 41-unit, class-A apartment building in Los Angeles. The combined purchase price for the assets was $13.8 million, DIG president Chris Dornin tells GlobeSt.com.
Tenaya Quail East is located along the 215 Freeway near Rainbow Blvd. at 6620, 6640 and 6670 S. Tenaya Way between Summerlin and the Las Vegas Strip. The property, built in 2005, was approximately 45% leased and had been in receivership and foreclosed on at the time it was auctioned off by the lender. It was acquired all cash in a very short escrow through Auction.com for $3.25 million.
Since closing, DIG has leased the property to 75% from 45% at the time of acquisition and is negotiating with several other prospective tenants for the balance of the space. Dornin said in a prepared statement, “This is a property we had been watching and trying to buy for over a year before we were the successful bidder. During that time, the occupancy declined as the lender was unwilling to make the necessary investment to lease up and retain tenants.”
Dornin added that the Las Vegas market is beginning to recover, and Tenaya represented an “outstanding opportunity to acquire a newer-built, extremely well-located property with flexible uses and at a price less than half of replacement cost. With the right ownership and management, we were very confident we could stabilize the occupancy at the property.”
The Kelsey Apartments, which was acquired for $10.45 million, was completed in November 2012 and delivered vacant at the time of acquisition. The property was originally designed to be sold as individual condominium units, but due to the housing crash the developer modified the development agreement to a for-rent project. Centrally located between Downtown, USC Campus and Koreatown at 1408 W. Washington Blvd., the property offers excellent freeway access.
The Kelsey Apartments also features a wide variety of floor plans including one-, two- and three-bedroom large condo-style units that average over 1,000 square feet with high ceilings, granite countertops, stainless-steel appliances, custom paint and cabinetry, washers and dryers in every unit and wood-style flooring. Amenities include individual balconies, views of Downtown L.A. and the Hollywood sign, subterranean secured parking, an elevator, a courtyard with chairs and tables, recreation/entertainment room and an option for ownership to install BBQs.
The property was acquired via a bridge loan from US Bank to lease up and stabilize it, after which DIG intends to refinance into a 10-year fixed-rate Fannie Mae loan through Berkeley Point Capital. Dornin Realty Advisors Inc., a wholly owned affiliate of DIG, is managing the asset.
“We are very excited to acquire such a high-quality property with so much upside in such a high-demand market as Los Angeles,” said Dornin. “Evidencing the demand for this project, in just the first four weeks since opening the leasing office, we have already leased 25% of the project at full asking rents during the toughest leasing season of the year.”
As GlobeSt.com previously reported exclusively, in October 2012 Berkeley Point Capital‘s Irvine, CA-based team, led by director Darrin Stoval, provided $37.8 million in financing for DIG to acquire seven multifamily properties in Southern California over the past year. All of the acquisitions were in the $5-million to $20-million range, on which Dornin focuses.