SACRAMENTO and LA MESA, CA—Trion Properties, a Los Angeles-based real estate investment company, has recently received a payoff of four loans from the owner of the four apartment properties encumbered by the debt. Trion also recently acquired a 21-unit multifamily property in La Mesa, CA and a 57, 254 square foot shopping center in Visalia, CA. These transactions continue the high volume of activity the company has generated over the past year with eight acquisitions and renovations along with five dispositions.
In mid-2012 Trion acquired a portfolio of notes at a discount to the unpaid principal balance of approximately $7,000,000. The notes had only a few months before maturity and were secured by four properties containing 224 apartment units in the Arden-Arcade submarket of Sacramento. Trion acquired the notes directly from a national lender and was subsequently able to work with the borrower on the timing and payoff of the loans, ultimately helping the borrower retain the assets and allowing Trion to exit without having to take title to the real estate.
Trion also recently closed on two acquisitions. In La Mesa, the company recently acquired a 21-unit multifamily property for $1,900,000. The property suffered from severe deferred maintenance and had a 35% vacancy in a submarket with a sub-5% vacancy factor. This was the result of the absentee owner remotely managing the property from the east coast without retaining a third-party management company. Trion’s plan is to extensively renovate the common areas and all of the units thereby allowing Trion to increase rents on leased units by 20% while filling the vacant units.
After stabilization, the property will either be refinanced or sold through the procuring brokers, Peter Scepanovic and Corey McHenry from Colliers International.
The next acquisition occurred in Visalia, CA, where Trion recently took title to a 57,254 square foot shopping center. The company acquired a nonperforming note on the asset in an all-cash transaction from a regional lender who had to remove it from their books by year-end. The broker who handled the note sale transaction was Nick Whitstone at CBRE. The property was reverted to Trion in a foreclosure sale on February 4, 2013 and Trion has immediately listed the property for sale with Mark Denholm from CORE Commercial for $4,750,000, which equates to $82.96/sf. Mr. Denholm can be reached at 916-274-4404 or firstname.lastname@example.org.
Commenting on this activity, Max Sharkansky, Principal with Trion, said, “We are continuing our business model of capitalizing on the distress in the marketplace caused by the financial crisis with the continued acquisition of distressed debt. At the same time, we are adjusting to the recovery by acquiring value-added assets where the opportunity lies in increasing NOI by improving the cosmetics and amenities in the common areas and the finishes in the units. We have also added retail assets to our portfolio and acquisition criteria because of its more tepid recovery in comparison to the multifamily asset class.”