LOS ANGELES-Apollo Real Estate Advisors LP has acquired a nine-property portfolio of 494 apartments, all built between 1919 and 1930, for $37.45 million in an unusual deal in which an institutional investor is buying into B and C submarkets. Darin Beebower of locally based Madison Partners, who joined with partner Bob Safai in representing both the buyer and the seller in the off-market transaction, tells GlobeSt.com that the apartments are the first multifamily assets that Apollo has acquired in this market.

Although the properties are in B and C submarkets, Beebower says, they are all considered desirable areas of Los Angeles because of the improving market conditions and strong demand from renters and investors, all of which has prompted apartment owners to invest in upgrades of properties in those submarkets in recent years. In addition, Beebower says, the nine properties that Apollo bought are in the Koreatown, Hollywood, Silverlake and Westlake markets, all of which offer significant upside under the New York-based buyer's plan to upgrade the apartments and raise rents.

Beebower comments that, for an institutional investor like Apollo to acquire a portfolio of smaller, 1920s era multifamily assets in B and C submarkets of Los Angeles "is a sign of the intense demand among institutional investors for Los Angeles multifamily assets." Investors are particularly keen about finding properties like these that offer the potential to add value, he points out.

Beebower tells GlobeSt.com that Apollo was especially eager to enter the multifamily market in Los Angeles, where it already owns assets in other property classes, but it wanted to find an acquisition large enough to meet its needs as an institutional investor. The nine-property portfolio fit the bill, he says.

Apollo's repositioning strategy includes renovating all of the properties extensively, raising rents to market levels and retaining the assets for a long-term hold. It acquired the portfolio from a partnership of two locally based companies, Cypress Equity Investments and Pacific Coast Capital Partners LLC.

The properties are located at 4816 Fountain Ave. in Hollywood; 904 N. Hoover St. in Silverlake; 716 S. Berendo St., 728 S. Berendo St. and 849 S. Oxford Ave. in Koreatown; 357 S. Alvarado St., 847 S. Alvarado St., 712 S. Westlake Ave. and 1109 S. Lake St. The complexes range in size from 29 to 98 units and were built between 1919 and 1930.