Buchanan Street is investing close to $6.3 million in joint venture equity from the Buchanan Funds in the property. The Newport Beach-based real estate investment bank also raised acquisition debt for the investment in the form of a near $17.8-million loan for 80% of the purchase price from a longtime capital markets partner. Besides the purchase price, the funding includes financing for renovations to the property, which underwent a minor renovation by the former owner in 2002. Tom Sherlock and Chris Dornin of Buchanan Street's Newport Beach office arranged the financing.

Built in 1986, Birchwood consists of 26 two-story buildings with 80 studio units, 96 one-bedroom units, 118 two-bedroom apartments and two three-bedroom designs. Approximately one fourth of the units are furnished and cater to students at the nearby University of California, Riverside. The studios measure 400 sf; one-bedrooms, 529 sf; two-bedrooms, 729 sf; and three-bedrooms, 1,229 sf. Monthly rents range from $680 to $1,380.

The buyers believe some of the deal's upside is in moving the 92%-occupied property to match the local occupancy rate, which is about 97%. Once the renovations are completed, they also foresee upside in the lifting of rental restrictions stemming from previously existing bond financing that was paid off in the Aslan-Buchanan purchase.

Tom Rakow, a partner at Aslan, tells GlobeSt.com that planned improvements at the complex include exterior painting, deck repair, signs, upgrading of unit interiors and a second swimming pool. The previous owner built a new clubhouse and a new pool, Rakow says, but the second pool will create a "resort-like" setting for the property. He tells GlobeSt.com that the new owners also plan to furnish more of the apartments for student renters, banking on the burgeoning enrollment at UC Riverside, which is projected to grow from its current 14,000 students to 19,000 students by 2008.

The acquisition marks the sixth time in the past two years that Buchanan and Aslan have combined on a value-add apartment investment. The sale was brokered by Sean Deasy in the Ontario office of CB Richard Ellis Inc.

Buchanan Street Partners is a real estate investment bank that provides capital for owners and developers. It makes both principal investments in a discretionary capacity through the Buchanan Funds and arranges conventional and structured debt solutions through its capital markets relationships. Aslan Realty Group was founded in early 2001 to acquire Southern California apartment complexes in value-add deals. The company owns a 1,300-unit, six-property portfolio with a value of approximately $112 million.