SANTA MONICA, CA-A local investor has acquired an apartment complex here at a sub-4% cap rate at time of sale and a gross rent multiplier of 16 in a quick close, according to CDI Investment Group, which negotiated the sale. Paul Tennen, president of CDI, tells GlobeSt.com that the transaction "was a market-setting sale in Santa Monica."

The property was the seven-unit Strand Street Apartments at 101 Strand St., which overlooks the ocean on Strand Street and Ocean Avenue. It sold for $3.6 million, or $514,000 per unit and $630 per square foot, after being on the market for only 20 days.

"In terms of price per unit, it was the most in about three years for a rent-controlled property," he says.

Tennen, who represented seller Wall Street Properties LLC along with John Tsukahira of CDI, says, "We received two offers in addition to the buyer’s offer, but felt very strong about the buyer’s ability to close the transaction."

Six of the seven units, which include two two-bedrooms and five one-bedrooms, were occupied at the close of escrow. A two bedroom owner’s unit upstairs was delivered vacant as the buyer intended to occupy the unit.

Tennen says that the other offers were from "very high net worth individuals who also recognized the one-of-a kind location that this building is in and the trophy asset that it is." Average rent for the one-bedrooms was approximately $2,600 and the two-bedroom downstairs rented for approximately $4,500.

"This was really a one of kind asset," Tennen says. He points out that properties like the Strand Street complex, situated immediately across the street from the ocean in Santa Monica, don’t trade often. "We felt that we needed to find a buyer who understood the rarity of the asset and could appreciate that it was not only well located but had income potential to go with it," Tennen adds.

The buyer, who financed the acquisition through Chase Bank, was represented by Francyne Shapiro Lambert of Lambert Investments Inc.