Covering 2.5 acres at 4055 Redwood Ave., Forty55 Lofts consists of 140-units in two-four-story buildings around a resort-style pool area with barbeques, a fire pit, and a decorative water feature. Residents also have immediate access to a 22-mile bike path running from Malibu to Redondo Beach. The units average 1,306 square feet and have 10- to 20-foot ceilings, oversized windows, large patios and high-end kitchens.

The investment flyer said the $70-million asking price was the result of capping the stabilized first-year pro forma at 5.0%, and then subtracting $2.5 million in lost revenue and other expenses associated with leasing up. It represents an 8.2% unleveraged IRR or a 10.4% leveraged IRR over a 10-year hold, assuming a 10-year rate of 6.0% and a debt service coverage of 1.25, according to the flyer, which listed rents in the $2,500- to $3,000-per-month range for adjacent developments. The sale closed toward the end of September. A spokesperson with Behringer Harvard declined to comment on the investment much beyond its press release.

Standard Pacific's Urban Division president Ram Fullen says that as the market conditions eroded during construction, "it became clear that selling the property to a rental investor was a viable alternative and economically a better strategy," adding that the vast majority of the apartments in the affluent beach community are at least 30 years old. Brett Betzler, the listing broker says the demand for high-quality rental product is very strong because Marina del Rey is close to the beach and LAX, and professional employment centers, such as Westwood and Century City.

"We believe that Redwood Lofts will appeal to an underserved segment of the market that is willing pay a little more for upscale accommodations," Betzler says. "Given the extraordinary difficulty of getting a new development approved in Marina del Rey, we see this is a long term competitive advantage."

Behringer Harvard says its JV acquired Forty55 Lofts "through a strategic alliance" with Phoenix-based Alliance Residential but did not further explain the relationship. Behringer has changed the name of the development to Redwood Lofts.

The Behringer Harvard Multifamily REIT I JV with PGGM has committed to investing at least $450 million of equity together, with the REIT being the 55% partner and PGGM being the 45% partner. The JV has acquired several properties in September.

On Sept. 17, it paid $96 million [plus closing costs] for the 438-unit, 88%-leased Gallery at NoHo Commons, also in Los Angeles. The 5.3-acre development also includes a resort-style pool as well as a fitness center and a recording studio. The following day, it paid $40 million [excluding closing costs and including a $26-million loan assumption] for Burrough's Mill, a 308-unit multifamily community located on an approximately 25.7-acre site in Cherry Hill, NJ, that holds a resort-style swimming pool, a fitness center, a tennis court and a business center. The property was approximately 95% occupied.

One week earlier, it paid $79.7 million [$65.24 million in assumed debt] for Waterford Place, a 390-unit multifamily community located on an approximately 8.28-acre site in Dublin, CA that holds a resort-style swimming pool, a fitness center and a movie theater. That same week it also paid $28.8 million for Mariposa Loft Apartments, a 253-unit development that was built in 2004 on a five-acre site in Atlanta, GA; amenities include a swimming pool and sundeck, a fitness center, a media room with surround sound, a children's activity room and a game room featuring shuffle board and billiards.