LOS ANGELES—A private investor has acquired the WhitelyHouse, a 100-unit apartment complex, for $14.7 million from an affiliate of Vista Investment Group in an off-market transaction. The property has 70 250-square-foot micro units, 30 500-square-foot junior one-bedroom units and 9,000 square feet of retail space on the ground floor.
Formerly a hotel, Vista Investment Group renovated the building into a micro-unit and junior one-bedroom complex between 2011 and September of 2012. “Micro-units allow renters access to well-designed, well-located apartment buildings at a price point not otherwise available,” says Jonathan Barach, Vista Investment president. “While not for everyone, the micro-unit concept appeals to a segment of renters, mostly young singles or couples that cannot afford the rent that larger units in the same area command.”
Madison Partners‘ partner Darin Beebower represented Vista Investments in the transaction while Sklar Kirsh attorney Andrew Kirsh provided legal counsel. Vista Investment Group purchased the then distressed asset in 2010 in the early stages of construction after the former owner’s renovation plans were waylaid by the recession. “Similar to our other clients who were able to make purchases during the recession, Vista is now seeing the benefits of those transactions by selling in today’s constrained multifamily market in Southern California,” says Kirsh. Beebower was unavailable for further comment about the deal.
Located at 1963 N. Caheunga Blvd., the property units have high-end fixtures to make up for the smaller square footage and a cool aesthetic with polished concrete floors and contemporary kitchens and baths. The ground-floor retail tenants include Pop Physique, Hopewell Workshop and MacPro LA. At the time of sale, the property had a 95% occupancy.
At the recent USC Gould Real Estate Law and Business Forum, Leanne Lachman, president of Lachman & Associates and the executive in residence at the Columbia Business School, explained that micro-units are becoming increasingly popular for Gen-Y tenants. On the same panel, Jamie Lee, CEO of Jamison Realty, agreed, citing a Koreatown office property that her firm was recently renovated into a apartment complex with several micro units. The average unit size is 600 square feet, but, like this property, makes up for the small space with high-end finishes. Within a month, the property had an 85% occupancy.