LOS ANGELES-Chicago-based apartment REIT Equity Residential has acquired the 225-unit Versailles Apartments, a luxury Koreatown complex, from Oxford Associates, an affiliate of Los Angeles-based Frost/Chaddock. The sale, which was an off-market transaction, is one of the largest multifamily deals to close in some time in the market.

James Frost, principal and owner of Frost/Chaddock Developers LLC, tells GlobeSt.com that the company developed the Versailles for all-in costs of approximately $40 million, including a series of transactions in 2004 when Oxford Associates purchased the entire city block at South Oxford Street between James Woods and San Marino streets, in the heart of Koreatown. The developer razed eight, 10-unit apartment complexes of circa 1930s vintage that were on the site and were in run-down condition to replace them with the 225-unit Versailles, also adding a substantial amount of parking in a three-level parking structure. Frost/Chaddock entitled the property for the 225 units through the state’s Bonus Density program, SB 1818, setting aside eight units for very-low-income households.

Frost says that the Versailles project reflects Frost/Chaddock's development approach of "identifying sites that have improvements that are substandard in terms of economic value and use" and then creating a project that will transform the site. He points out that when Oxford Associates began the assemblage of land for the project, Koreatown had not yet entered the renaissance that transformed it into the thriving residential and commercial district that it later became.

The size and scale of the Versailles development was "transformative" for Koreatown and was regarded as one of the best developments during the period when investors and developers were renovating existing residential and commercial buildings and developing ground-up projects as well, Frost says. The complex is within walking distance of Koreatown Plaza Shopping Center and less than a quarter-mile from a Metro Red Line station.

The Versailles, which took two years to entitle and two to build, was completed in the summer of 2008. Frost/Chaddock, which serves as its own general contractor through its affiliate FCD Construction Inc., finished the project under budget and ahead of schedule.

The Versailles, which was 95% occupied at the time of the sale, features units of one and two bedrooms ranging from 600 square feet to 950 square feet. Rents range from $1,450 to $2,395, according to the Equity Residential web site.

The Versailles is one of more than 160 properties valued in excess of $300 million that Frost/Chaddock has developed or redeveloped since its founding in 1994 by Frost and Guy Chaddock. The company's current portfolio of projects under management includes approximately 400 apartment units, 350 apartment units under entitlement and 50,000 square feet of retail product in various stages of entitlement or construction.