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

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

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

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

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

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Located at 111 West Orangewood Ave., Pacific Palms is situatedwithin two miles of Disneyland, Anaheim Gardenwalk, the AnaheimConvention Center, and Anaheim’s 805-acre redevelopment zone knownas the Platinum Triangle. The complex features 40 buildings withone, two and three bedroom units in multiple floor plans measuringfrom 940 to 1,560 square feet with in-place rents ranging fromnearly $1,200 to over $1,700 per unit. The property "fits the localdemographic perfectly by offering some of the largest units in thesub-market at a price point below the immediate competition,” saidLeon. Zander added that the selling price "reflects today’saggressive underwriting and the tremendous appetite of the capitalmarkets. The buyer recognized a unique opportunity to purchase anolder asset in an established market with very low ownershipturnover combined with increasing rental rates in an excellentlocation.

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Advanced Management Co. will take over the day to day operationsof the property, which is part of a portfolio of over 6,000 rentalunits and 200 acres of developable land, all in SouthernCalifornia, that ARES owns. The Lake Forest-based companyspecializes in multifamily investments, development, propertymanagement and renovations.

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