ANAHEIM, CA-Advanced Real Estate Services Inc. of Lake Forest has acquired a 149-unit apartment complex called the Pacific Palms for $21 million from an LLC controlled by UDR, a Denver-based apartment REIT. The property is a two-story project of 126 two-bedroom units, 20 one-bedroom units and three three-bedroom units. The units average approximately 1,050 square feet and are either townhomes or single-story units on over eight acres. The property was over 95% occupied at closing.

ARES intends on renovating and repositioning the property "to capitalize on the upside in rents the market," the company says. Rick Julian, president of ARES, notes that the company already operates more than 1,000 units in Anaheim and has acquired 700 units in Southern California in the last 12 months. ARES, which has a track record spanning nearly 30 years, is actively acquiring apartment properties in Southern California with a large base of privately placed equity.

The sale was brokered by Joe Leon of the Newport Beach office of Hendricks & Partners and Dean Zander of Hendricks & Partners in Los Angeles, who represented the seller. Mike Elmore of NorthMarq Capital arranged a 10-year fixed-rate financing at 4.48% through Freddie Mac.

The sale of the 48-year-old community "represents the continued demand by the private sector for well-located larger assets, especially those with a compelling ‘value-add’ component," Leon and Zander say. Leon said that, "Since Pacific Palms has a wide variety of unit types, including townhomes, and offers excellent amenities, the property is well-poised to capitalize on the recovering multifamily market."

The property generated numerous offers from private families, regional investors, and national operators, many of whom were attracted to the location, oversized unit types, and the optimistic growth assumptions for the Orange County apartment market, according to the Hendricks & Partners brokers.

Located at 111 West Orangewood Ave., Pacific Palms is situated within two miles of Disneyland, Anaheim Gardenwalk, the Anaheim Convention Center, and Anaheim’s 805-acre redevelopment zone known as the Platinum Triangle. The complex features 40 buildings with one, two and three bedroom units in multiple floor plans measuring from 940 to 1,560 square feet with in-place rents ranging from nearly $1,200 to over $1,700 per unit. The property "fits the local demographic perfectly by offering some of the largest units in the sub-market at a price point below the immediate competition,” said Leon. Zander added that the selling price "reflects today’s aggressive underwriting and the tremendous appetite of the capital markets. The buyer recognized a unique opportunity to purchase an older asset in an established market with very low ownership turnover combined with increasing rental rates in an excellent location.

Advanced Management Co. will take over the day to day operations of the property, which is part of a portfolio of over 6,000 rental units and 200 acres of developable land, all in Southern California, that ARES owns. The Lake Forest-based company specializes in multifamily investments, development, property management and renovations.