LOS ANGELES—The Roberts Co. has acquired the Esquire apartment complex in Koreatown for $22.7 million from Watermarke Properties in an off-market transaction. The sale included the payoff of a $12 million HUD loan.
“This property breaks the $200,000-per-door record for a rent-controlled building in Koreatown, which is really rare,” Michael Koshet, the ReMax Commercial broker who represented the seller in the transaction, tells GlobeSt.com, adding that this is an unusually high price for a rent-controlled building. This transaction took eight months to complete, and the property received multiple offers from potential buyers.
Located at 274 S. La Fayette Park Place, Esquire has 117 studio, one- and two-bedroom units with a gym, rooftop deck and several common rooms and event spaces. The common areas in the building and all but 30 of the units were completely renovated prior to the sale. “The previous owner had completely gutted and renovated the whole building. So not only are the units rehabbed, but if you walk through the hallways and common areas, those are completely brand new as well,” Dario Svidler, a Triad Realty Group broker, tells GlobeSt.com. Svidler represented the buyer in the transaction, who plans to renovate the remaining 30 units as they become vacant. Average rental rates for a one-bedroom apartment in the building are $1350.
The burgeoning Koreatown market and the large building size attracted the buyer to this acquisition opportunity. “Mike and I have been involved in the Koreatown area for quite sometime,” says Svidler. “This specific pocket of Koreatown is very desirable because it is near a school, it is clean and quite and it is not the traditional Western and Wilshire area of Koreatown.” Koshet also adds, “There is a lot more financial stability in this part of Koreatown, so people can afford higher rental rates.”
Koreatown is undergoing its own gentrification, largely led by the recent opening of the Line Hotel and several of the city’s top restaurants, like Lock & Key. At USC Gould’s Real Estate Law and Business Forum this year, Jamie Lee, CEO of Jamison Realty Inc., talked about growth in the Koreatown market during the Gen Y panel. Her company repositioned a vacant office building into a multifamily complex targeting the Gen Y demographic. The property completed construction in November and had 85% occupancy by the end of the year. It is generating average rents of $2.75 per square foot.