LOS ANGELES—A joint venture between Skya Ventures and Gelt Ventures has acquired a 60-unit apartment complex in the Highland Park neighborhood of Los Angeles from Azusa Pacific University. The property is located at 5800 to 5820 Marmion Way, and, while the investor wasn't privy to the marketing process, they heard that the property had as many as 25 other offers. It isn't surprising considering that we are starting to report more and more investors looking for opportunities in the Highland Park market. To find out why this is becoming an attractive market for investment, we sat down with Gelena Skya-Wasserman, president and founder of Skya Ventures for an exclusive interview.

GlobeSt.com: Why is Highland Park an attractive spot for investment? 

Gelena Skya-Wasserman: Highland Park is an attractive submarket for investment for two main reasons: location and demand. This neighborhood is nestled between two of the most active employment centers in Los Angeles: Downtown LA and Pasadena. For our acquisition of 5800 Marmion Way, the locational attributes were even better, as the property is directly in front of the metro that provides access to San Gabriel Valley, Pasadena, Downtown LA, Santa Monica, San Fernando Valley, Long Beach and Culver City. We were also attracted to the desirable walk score that Marmion has. We are watching this location improve before our very eyes as places such as Verve Coffee, Birdies and Intelligentsia Coffee—just to name a few—are also making their entrance here later this year.

Secondly, demand is huge for this neighborhood and it continues to increase. Young families looking to own a home in Los Angeles started to move into Highland Park due to its location, affordability, and walk score. As more families started moving in, more businesses emerged to support the growing population.

However, what we found was that there was still a shortage of apartments for rent to support the growing creative millennials seeking to live, dine, and shop in Highland Park. Given that the majority of the apartments in Highland Park are older and not always well maintained, a large portion of this successful and creative demographic is seeking apartment product that features high-end finishes and amenities. Investment in the area to help meet that high demand is certainly attractive.

GlobeSt.com: Is there concern about the number of rent-controlled properties in the area? 

Skya-Wasserman: There certainly is no shortage of rent-controlled apartments in the area. Many apartments in Highland Park were built before 1978; thereby the majority of the rental-housing product in Highland Park is rent-controlled. Our investment appetite is primarily for non rent-controlled assets that have value-add potential and are able to garner rents at market rates and future market appreciation. The Millennial demographic I mentioned above that is looking to live in Highland Park is seeking a higher-end, luxury residential product that the rent-controlled properties simply don't offer. Because the availability of non rent-controlled product is so tight, the demand is arguably higher than other areas from both residents and investors. With that said, when non rent-controlled assets are listed in Highland Park, they garner a strong amount of investor competition and interest.

GlobeSt.com: Are you seeing high investor competition in this market like you see in some of the other emerging markets?

Skya-Wasserman: Los Angeles is a highly competitive market in general, and we definitely experienced that competitive nature on this latest property acquisition. We were told that there were at least 25 other offers on the Marmion Way asset.

GlobeSt.com: Where do you see values and rents heading in this market over the next five years, and how does it compare with other emerging markets in L.A., like Koreatown?

Skya-Wasserman: Housing prices in Highland Park have risen significantly over the past several months with current price per square foot rates for single-family homes at around $527. We have also seen rents rise in Highland Park by 27 percent since 2011. However, if you look at most Los Angeles markets, rents have increased year over year for the most part. No one knows exactly where rents and values will be in five years, but we believe in the strength of the Highland Park neighborhood and all the fundamentals point to the growth in property values and rents over time. With that said, I would not be surprised to see Highland Park be on par with Silver Lake values and rents over the next five years.

LOS ANGELES—A joint venture between Skya Ventures and Gelt Ventures has acquired a 60-unit apartment complex in the Highland Park neighborhood of Los Angeles from Azusa Pacific University. The property is located at 5800 to 5820 Marmion Way, and, while the investor wasn't privy to the marketing process, they heard that the property had as many as 25 other offers. It isn't surprising considering that we are starting to report more and more investors looking for opportunities in the Highland Park market. To find out why this is becoming an attractive market for investment, we sat down with Gelena Skya-Wasserman, president and founder of Skya Ventures for an exclusive interview.

GlobeSt.com: Why is Highland Park an attractive spot for investment? 

Gelena Skya-Wasserman: Highland Park is an attractive submarket for investment for two main reasons: location and demand. This neighborhood is nestled between two of the most active employment centers in Los Angeles: Downtown LA and Pasadena. For our acquisition of 5800 Marmion Way, the locational attributes were even better, as the property is directly in front of the metro that provides access to San Gabriel Valley, Pasadena, Downtown LA, Santa Monica, San Fernando Valley, Long Beach and Culver City. We were also attracted to the desirable walk score that Marmion has. We are watching this location improve before our very eyes as places such as Verve Coffee, Birdies and Intelligentsia Coffee—just to name a few—are also making their entrance here later this year.

Secondly, demand is huge for this neighborhood and it continues to increase. Young families looking to own a home in Los Angeles started to move into Highland Park due to its location, affordability, and walk score. As more families started moving in, more businesses emerged to support the growing population.

However, what we found was that there was still a shortage of apartments for rent to support the growing creative millennials seeking to live, dine, and shop in Highland Park. Given that the majority of the apartments in Highland Park are older and not always well maintained, a large portion of this successful and creative demographic is seeking apartment product that features high-end finishes and amenities. Investment in the area to help meet that high demand is certainly attractive.

GlobeSt.com: Is there concern about the number of rent-controlled properties in the area? 

Skya-Wasserman: There certainly is no shortage of rent-controlled apartments in the area. Many apartments in Highland Park were built before 1978; thereby the majority of the rental-housing product in Highland Park is rent-controlled. Our investment appetite is primarily for non rent-controlled assets that have value-add potential and are able to garner rents at market rates and future market appreciation. The Millennial demographic I mentioned above that is looking to live in Highland Park is seeking a higher-end, luxury residential product that the rent-controlled properties simply don't offer. Because the availability of non rent-controlled product is so tight, the demand is arguably higher than other areas from both residents and investors. With that said, when non rent-controlled assets are listed in Highland Park, they garner a strong amount of investor competition and interest.

GlobeSt.com: Are you seeing high investor competition in this market like you see in some of the other emerging markets?

Skya-Wasserman: Los Angeles is a highly competitive market in general, and we definitely experienced that competitive nature on this latest property acquisition. We were told that there were at least 25 other offers on the Marmion Way asset.

GlobeSt.com: Where do you see values and rents heading in this market over the next five years, and how does it compare with other emerging markets in L.A., like Koreatown?

Skya-Wasserman: Housing prices in Highland Park have risen significantly over the past several months with current price per square foot rates for single-family homes at around $527. We have also seen rents rise in Highland Park by 27 percent since 2011. However, if you look at most Los Angeles markets, rents have increased year over year for the most part. No one knows exactly where rents and values will be in five years, but we believe in the strength of the Highland Park neighborhood and all the fundamentals point to the growth in property values and rents over time. With that said, I would not be surprised to see Highland Park be on par with Silver Lake values and rents over the next five years.