GLENDALE, CA—The Sirott Family Trust has acquired two apartment complexes in Glendale for a total of $24.8 million in an effort to expand its Los Angeles multifamily portfolio. This is the first time the properties have come to market since the original development.
“This was a good opportunity for the buyer to increase its portfolio. He has additional units in the area, and he had enough capital for close to a 45% down payment,” Jesus Henao, VP at NAI Capital‘s Encino office, tells GlobeSt.com. Henao represented the buyer in both transactions.
Located at 1234 E. California Ave., Villa Monaco Apartments is the larger of the two properties with 49 units. The buyer purchased the building for $15.5 million from Villa Monaco LTD. The smaller building is the Villa Geneva Apartments, located at 1304 E. California Ave. Sirott Family purchased the 36-unit property from Glendale Villa Geneva for $9.3 million. The two purchase prices equate to $219,000 per unit, the highest price per unit in the market, and at a strong cap rate of 3.41%. Both properties were purchased in off-market transactions.
Although the buyer purchased the building at a high cost per unit, the buildings are currently generating rents at nearly half the market value, according to Henao. A two bedroom is generating $1100 rents while the market average in Glendale for a two-bedroom in $2100. “There is significant upside in rents here,” says Henao.
In addition to potential income benefits, the properties are also located in prime Glendale neighborhoods near the Americana at Brand, the Glendale Galleria and minutes from Old Towne Pasadena. The area has a high demand for apartment living as well as luxury rentals. Last month Caruso Affiliated noted that it plans to develop 16 penthouse apartments at the Residences at the Americana.