SAN CLEMENTE, CA-Real Estate Partners Inc. of Irvine has acquired the 368-unit Seacrest Apartments from JP Morgan Investment Management Inc. for $87.5 million and plans to spend more than $10 million to renovate the property. The acquisition is the first for REP in Orange County and represents its largest single investment ever.

Real Estate Partners sought the complex because it represented "a very rare opportunity to acquire a coastal-view oriented property that is virtually irreplaceable in today's market," says Dawson Davenport, CEO of the Irvine-based company. The Seacrest complex, consists of 27 buildings on 25.29 acres at 240 Avenida Vista Montana.

Seacrerst was built in 1988, but to build it today "would cost over twice as much as we are paying for it in acquisition and renovation costs combined," Davenport says. "That is, if you could even develop it at all," he adds.

The property features four floor plans in units of one and two bedrooms that range from 660 sf to 950 sf. Real Estate Partners plans to renovate and expand the tenant common areas, to add a new business center and expand the fitness center, add a media center and add laundry facilities to the units.

Other renovations for the units will include a higher level of finishes, the addition of crown molding, new lighting, cabinet upgrades, granite counters and stainless steel appliances. The buyer plans to improve management through Real Estate Partners Asset Management Services Inc., an affiliate company in which it owns a majority interest.

The Seacrest acquisition is the second large apartment buy in Southern California this year for the company, which bought the 250-unit Arbors at Warner Center for $50 million in May. The company plans up to $600 million in additional multifamily acquisitions by the end of 2007, which will bring its total owned and managed asset base to more than $1 billion, Dawson says.

Sean Deasy, Bob Patterson and Ryan Fitzpatrick of CB Richard Ellis in Ontario represented the seller, with Real Estate Partners representing itself. Financing of $94.5 million for the acquisition was arranged by Jason Krupoff and Daniel Blanck of Capmark Finance Inc., formerly known as GMAC Commercial Mortgage.