CULVER CITY, CA—The influx of tech and creative companies in the Culver City, CA market is driving rental rates and property values up, especially for luxury apartment buildings, according to Greg Harris, executive director at Institutional Property Advisors. In an earlier story, GlobeSt.com reported that Harris represented the seller, MWest, in the disposition of Keswick Court Apartments, a 60-unit, luxury apartment complex. The buyer purchased the property in the upleg of a 1031 exchange, but more generally, the sale indicates the rising demand for quality multifamily in the area.
“The asset was located adjacent to growing startup tech and media companies fostering new high earning tech professionals that have a demand for luxury housing,” Harris tells GlobeSt.com. “As Culver City continues to cultivate new employment, the submarket is realizing significant rent growth and value appreciation. The property has benefited from the high paying jobs in the marketplace, and will continue to do so for the foreseeable future.”
Harris received significant attention from potential buyers for the property because, as he notes, it “appealed to the entire spectrum of the buyer pool ranging from private real estate partnerships and companies to sponsored capital and institutions.” In the end, he had 10 offers on the table and the selected buyer was a local, private investor, who was interested both for the close proximity to job centers and demand for housing as well as the property’s revenue stream. The property has a value-add component as only 35 units have been updated. The buyer has a great opportunity to build revenue by updating the remaining units.
“The timing of the offering allowed the seller to prove out the renovation business plan while still leaving enough value-add opportunity for the next investor, which drove interest and value,” says Harris. “At the same time, the expo is nearing completion into Santa Monica, and the seller wanted to capitalize on this monumental development.”