FULLERTON, CA—Advanced Real Estate Services' recent purchase of a 421-unit multifamily property here was possible due to its track record on large deals, ability to raise sizable funds and ability to renovate buildings of that vintage, the firm's VP Paul Julian tells GlobeSt.com. As we recently reported, ARES acquired the property from an undisclosed seller for an estimated $100 million, one of the largest multifamily transactions in Southern California so far this year, and plans to renovate and rebrand it into Uptown Fullerton. We spoke exclusively with Julian about the transaction and the Fullerton apartment market.

GlobeSt.com: What was compelling for you about this particular asset?

Julian: The property's location is appealing. It is situated near one of the largest universities in the state, has great freeway access and is close to major employment and amenities. The freeway accessibility makes for a convenient commute to major business centers in Orange County, L.A. and the Inland Empire. Further, the majority of our portfolio of more than 8,000 units is within a 10-mile radius of this property, and more than 400 of those units are within the city of Fullerton.

The property itself is spread over a large parcel and has terrific facilities such as four pools, five spas, two tennis courts, two fitness centers, a business center, a volleyball court and a basketball court. It is also a prime candidate for a complete renovation and has potential for much higher rents. Our firm is uniquely qualified to handle this task with our in-house renovation company, R³ Construction, which boasts a 30,000-square-foot facility in Irvine and a state-of-the-art cabinet shop. We are currently completing full-scale renovations of around 50 units each month for our portfolio and for others.

GlobeSt.com: How would you characterize the Fullerton apartment market for investors?

Julian: The Fullerton/Brea apartment market has been historically strong. Although it is predominantly a suburban market, it is similar to Orange and Santa Ana in that it offers a true walkable downtown with shops and restaurants. There has been very little new apartment development in Fullerton and Brea over the last 20 years. The newest property, Malden Station, is on the opposite side of town with starting rents $300 to $700 higher than the rents we budgeted for Uptown when it is fully renovated. We feel this puts us in a strong, underserved sector of the market. Our rents will be slightly above the older un-renovated product and far below the newer product. There is obviously a significant Millennial contingent in Fullerton with the university, and we estimate they will be attracted to our fresh new property. Because our rents are so far below the class-A competitors, we will be the more affordable option for this group.

GlobeSt.com: What are the factors that led to this being one of the largest multifamily transactions in Southern California this year?

Julian: Southern California, and particularly Orange County, traditionally does not see many multifamily trades of $100 million or more. Many of the large landlords are long-term holders and do not often sell.  This property was purchased from a REIT who is traditionally a long-term holder as well. However, this property was much older than the rest of their portfolio. Their recent focus has been new development, and so they divested of this older property to free up funds. We believe that our ability to raise the significant funds needed for this transaction, our track record to close transactions of this size and our ability to renovate buildings of this vintage gave the seller the confidence to choose us as the buyer.

GlobeSt.com: What else should our readers know about your future plans for this property?

Julian: We have big plans for this property. The end result will be a hip, modern environment with unparalleled amenities. The interiors of the units will receive all-new, euro-style, high-gloss cabinets, quartz countertops; farm sinks; stainless steel appliances; wide-plank vinyl flooring; nest thermostats (and other “smart” features); LED lighting; new plumbing and electrical fixtures; new dual-paned windows; scraped-ceilings; and a modern paint scheme. The exterior will have a new paint scheme, signage, an upgraded leasing office, renovated pool areas with cabanas and a new state-of-the art gym. We also plan to build the already-entitled 40 units on the site.

Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.

FULLERTON, CA—Advanced Real Estate Services' recent purchase of a 421-unit multifamily property here was possible due to its track record on large deals, ability to raise sizable funds and ability to renovate buildings of that vintage, the firm's VP Paul Julian tells GlobeSt.com. As we recently reported, ARES acquired the property from an undisclosed seller for an estimated $100 million, one of the largest multifamily transactions in Southern California so far this year, and plans to renovate and rebrand it into Uptown Fullerton. We spoke exclusively with Julian about the transaction and the Fullerton apartment market.

GlobeSt.com: What was compelling for you about this particular asset?

Julian: The property's location is appealing. It is situated near one of the largest universities in the state, has great freeway access and is close to major employment and amenities. The freeway accessibility makes for a convenient commute to major business centers in Orange County, L.A. and the Inland Empire. Further, the majority of our portfolio of more than 8,000 units is within a 10-mile radius of this property, and more than 400 of those units are within the city of Fullerton.

The property itself is spread over a large parcel and has terrific facilities such as four pools, five spas, two tennis courts, two fitness centers, a business center, a volleyball court and a basketball court. It is also a prime candidate for a complete renovation and has potential for much higher rents. Our firm is uniquely qualified to handle this task with our in-house renovation company, R³ Construction, which boasts a 30,000-square-foot facility in Irvine and a state-of-the-art cabinet shop. We are currently completing full-scale renovations of around 50 units each month for our portfolio and for others.

GlobeSt.com: How would you characterize the Fullerton apartment market for investors?

Julian: The Fullerton/Brea apartment market has been historically strong. Although it is predominantly a suburban market, it is similar to Orange and Santa Ana in that it offers a true walkable downtown with shops and restaurants. There has been very little new apartment development in Fullerton and Brea over the last 20 years. The newest property, Malden Station, is on the opposite side of town with starting rents $300 to $700 higher than the rents we budgeted for Uptown when it is fully renovated. We feel this puts us in a strong, underserved sector of the market. Our rents will be slightly above the older un-renovated product and far below the newer product. There is obviously a significant Millennial contingent in Fullerton with the university, and we estimate they will be attracted to our fresh new property. Because our rents are so far below the class-A competitors, we will be the more affordable option for this group.

GlobeSt.com: What are the factors that led to this being one of the largest multifamily transactions in Southern California this year?

Julian: Southern California, and particularly Orange County, traditionally does not see many multifamily trades of $100 million or more. Many of the large landlords are long-term holders and do not often sell.  This property was purchased from a REIT who is traditionally a long-term holder as well. However, this property was much older than the rest of their portfolio. Their recent focus has been new development, and so they divested of this older property to free up funds. We believe that our ability to raise the significant funds needed for this transaction, our track record to close transactions of this size and our ability to renovate buildings of this vintage gave the seller the confidence to choose us as the buyer.

GlobeSt.com: What else should our readers know about your future plans for this property?

Julian: We have big plans for this property. The end result will be a hip, modern environment with unparalleled amenities. The interiors of the units will receive all-new, euro-style, high-gloss cabinets, quartz countertops; farm sinks; stainless steel appliances; wide-plank vinyl flooring; nest thermostats (and other “smart” features); LED lighting; new plumbing and electrical fixtures; new dual-paned windows; scraped-ceilings; and a modern paint scheme. The exterior will have a new paint scheme, signage, an upgraded leasing office, renovated pool areas with cabanas and a new state-of-the art gym. We also plan to build the already-entitled 40 units on the site.

Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.