VENTURA, CA-JPI of San Diego has acquired the 400-unit Archstone Pelican Point apartment complex from Englewood, CO-based Archstone-Smith for $85 million, according to Moran & Co. Michael Murphy of the West Coast office of Chicago-based Moran & Co. says that the complex offered the buyer "a rare chance" to acquire a multifamily property in a high-barrier-to-entry market in one of the area's most desirable suburbs.

Murphy, who represented the seller, explains that the Pelican Point property is in one of the country's strongest multifamily markets. The combination of strong market fundamentals and the limited supply of multifamily properties on the market "generated incredibly strong investor interest," he says.

Murphy adds that the apartment complex, built in 1984, is 30 minutes south of Santa Barbara in "a seaside market that has seen little new development since the 1980s" due to legislated growth restrictions that prevented new housing construction. Ventura County's rising home prices and a lack of significant new multifamily development "have led to some of the strongest apartment fundamentals in the country," Murphy points out.

Like the rest of Southern California, Ventura's pipeline dried up in the late 1980s. Since then however, growth control initiatives passed in the mid 1990s and geographical boundaries have conspired to make new construction in the region a rarity, Murphy adds.

Besides its location, Archstone Pelican Point attracted considerable investor interest because of the existing quality of the asset and its substantial value-added opportunity, according to Murphy. He says that JPI will have the chance to complete and enhance the upgrade program started by Archstone-Smith, which completed $2.3 million in renovations in recent years.

The majority of the renovation budget went to upgrading the interiors, which generated rent premiums in the range of $100 to $150. Only 13% of households in Ventura County can afford to buy a median-priced home, and with the median price at $664,000, a home buyer's monthly outlay would be more than three times the average rent of an upgraded apartment at Archstone Pelican Point.

Vince Lee, senior vice president of JPI, points out that, as a result of these conditions, rents have been rising more than 5% every year since 1998 and the apartment market vacancy rate stands at just 2%. Lee describes the Archstone Pelican Point property as "one of the few prospects to enter a market with a limited supply" of potential acquisitions.

The apartment complex is situated on a landscaped 14.34-acre site. The complex consists of 33 two-story buildings with 400 units consisting of 154 one-bedroom units and 246 two-bedroom apartments. Units range size from 450 sf to 898 sf, with common area amenities including a recently renovated rental office, new fitness center and two separate pool/spa areas with large sundecks.