Sales activity has picked up in the midyear, and it is showing. Many professionals in the industry are reporting a summer rise in transaction volume—typically at a time of the year with activity slows for vacations. This week, the transaction volume was strong, with significant acquisitions and capital markets activity across asset classes and in diverse Southwest markets. Overall, industrial and multifamily product seems to continue to dominate, and the outlook for both sectors is strong through the end of the year, which means we will likely seem more deal activity like this. Additionally, employment activity ticked up slightly after a small slowdown with no announcement for the past couple of weeks. Below are a round up of the most noteworthy sales from the week, as well as a look at this week's trends, announcements and deals that you may have missed in Southern California, Utah, Arizona and Nevada.

BY THE NUMBERS

With strong rent growth and low vacancy rates, Los Angeles is expected to become the third ranked industrial market in the nation. This activity is resulting in ample new construction at a the highest pace since 2007. This year, there will be 6.6 million square feet of industrial space under construction and 2.4 million square feet delivered in the market. This is the biggest supply increase in more than a decade, and it will trigger a 30-basis-point rise in the metro vacancy rate to 2.4%. In the prior four quarters, vacancy rose 10 basis points as supply outpaced net absorption. The average asking rent is expected to increase 8.6% to $10.23 per square foot as tenant competition pushes up prices in core industrial submarkets. Value-add properties in outlying submarkets will attract greater selling prices as tight operations in proximity to the ports sponsor more tenants to move outward.

(SOURCE: MARCUS & MILLICHAP)

Phoenix has a rapidly growing multifamily construction pipeline. There are currently more that 31,000 apartment units at some phase in the construction pipeline. Already, 1,620 units have delivered into the market, and 17,197 units are under construction and there are another 12,310 units planned to break ground in the market.

(SOURCE: ABI MULTIFAMILY)

NEW & NOTABLE
LONG BEACH, CA— The Long Beach Board of Harbor Commissioners has elected Lou Anne Bynum as its new Board President and Tracy Egoscue as Vice President. The Board also voted Lori Ann Guzmán as Secretary of the Board. Guzmán has served as Board President, and Bynum as Vice President, for the past two years. Bynum is Executive Vice President of College Advancement and Economic Development for Long Beach City College. Egoscue, a Long Beach-based environmental attorney, was appointed to the Commission by Mayor Robert Garcia in September 2014. Former state Assemblymember Bonnie Lowenthal, who is also a former Long Beach City Council member, and former Long Beach City Council member Frank Colonna have been appointed by Mayor Garcia and confirmed by the City Council to take the places of Dines and Drummond.

IRVINE, CA—Scott Sawyer has joined Kidder Mathews' Orange County office where he will specialize in industrial properties, primarily in the West Orange County market. Prior to joining Kidder Mathews, Sawyer was with NAI Capital in their Irvine office, where he was honored “Rookie of the Year.”

TUCSON, AZ—CBRE Group has hired Suzanne Droubie as VP of Property Tax Services. In her new role, she will focus on advising colleagues, associates, and clients on all aspects of commercial property tax, such as appeal processes, minimizing tax liability, tax estimates current holdings and future acquisitions, in Arizona, New Mexico, and Minnesota. Her extensive property tax experience will be a valuable asset to CBRE. Droubie has more than 14-years of experience and most recently was both a land and commercial appraiser for the Pima County Assessor's Office as well as a project manager in finance and risk management.

DEALTRACKER

SANTEE, CA— Carlton Heights Villas, LLC, an affiliate of Sentre Partners, has sold Carlton Heights Villas, located in Santee at 9705 Carlton Hills Boulevard, for $13 million. Berkadia's La Jolla office handled the transaction led by Kyle Pinkalla and Ed Rosen. The property was 96% occupied at the time of the sale. Berkadia represented the seller. The buyer was CVG Properties.

LAS VEGAS— Dornin Investment Group has acquired the Sunrise Springs Apartments, a 192-unit class-B value-add garden-style community that is located on East Twain Avenue in the East submarket of Las Vegas. The property was REO and has been asset managed by CW Capital over the past several years. The property is located on 8.44 acres and is considered the best property in the submarket. The property was 97% occupied at the time of the sale. The complex is in the process of undergoing a base building and unit interior renovation program. Several amenities, the parking lot, and 152 unit interiors have been upgraded over the past few years.

DIG will continue the interior and exterior capital improvement program. The business plan includes renovating the remaining 40 units and improving the property's curb appeal by painting the exterior of each building, upgrading the landscaping, club house, gym and two pool areas. The purchase was financed with a 10-year fixed rate Fannie Mae loan through Darrin Stovall of Berkeley

Point Capital. ARA Newmark represented the seller in the transaction and DIG represented itself. DIG has selected

BOULDER, CO—Avanath Capital Management has acquired Depot Square, a 71-unit affordable housing community in Boulder, Colorado for $13.6 million. This is the firm's first acquisition in Colorado. Depot Square is a Class-A, LEED Gold Certified affordable property near the new Boulder Google campus, and was built as one component of Boulder Junction, a 160-acre mixed-use, transit-oriented development, which includes a 150-room hotel, a restaurant, five-story parking structure, and an underground RTD bus station.

LOS ANGELES—Olive Hill Group has obtained $41 million in fixed-rate refinancing for its Courtyard at Culver Pointe, a Class-A creative office campus in the rapidly growing Culver City submarket of Silicon Beach. The financing was arranged by principal Andy Bratt and VP Amit Tyagi of Newmark Realty Capital, Inc. Headed by real estate lawyers Michael Cho and Tim Lee, Olive Hill Group acquired the office buildings for $65.6 million in May 2016 and recently launched a major redevelopment and rebranding of the property to The Courtyard at Culver Pointe. The redevelopment will include upgraded seating areas throughout the courtyard, food truck loading zones, a bocce ball court, and a new on-site gym facility, among others.

LOS ANGELES—Terreno Realty Corporation purchased an industrial property in Compton for approximately $9.35 million. CBRE's Brian Held, Rob Flores and Ryan Foley represented the buyer, and Andrew Kim of The Real Estate Group represented the seller, Young Kim, owner of apparel company Moa Moa, Inc. Located at 1215 W. Walnut Street, the warehouse totals approximately 57,664 square feet and features eight dock-high loading positions, 24-foot minimum clearance with easy access to several major freeways including the 91, 110, and 710. Moa Moa will lease back the property at the close of escrow for five years.

ONTARIO, CA—Bellwether Enterprise Real Estate Capital LLC has closed two loans totaling $75 million for the refinancing the Vistara Apartments. The deal was comprised of a $59 million permanent loan and a $16 million mezzanine loan. Completed in September 2016, Vistara Apartments is a luxury apartment development including 15 three-story residential buildings totaling 298 one bedroom, two-bedroom, and three-bedroom units. Located on the border of Rancho Cucamonga, the community features impressive amenities, including a one-story clubhouse and leasing office, a 24-hour fitness and yoga center, a resort pool area with spa, three outdoor entertainment areas with televisions and barbeques, 575 parking spots, and a dog wash and grooming area. Each individual unit boasts state of-the-art interior features, including stainless steel appliances, custom cabinets, walk-in closets, and quartz countertops. Tom Kenny, EVP of Bellwether Enterprise, and Josh Boehling, VP of Bellwether Enterprise in the Irvine office, arranged the loan for the borrower using two different life company lenders for the permanent loan and the mezzanine loan.

LONG BEACH—A high profile single tenant Carl's Jr. located in Long Beach has traded hands for a record breaking cap rate. The buyer acquired the property for $5 million, with a 3.85% cap rate and $1,685 price per square foot, making this the lowest cap rate, highest price per square foot, and highest price point for a Carl's Jr. or Hardee's to have ever sold anywhere in the U.S. The property completed construction in June and opened for business earlier this month. SRS' National Net Lease Group has sold or is under contract with more than 170 properties year to date for 2017 across the country. While the investment sales industry is reporting transaction volume to be down by 10%, the NNLG is experiencing a volume increase in excess of 30%. Matthew Mousavi and Patrick Luther, both managing principals of SRS' National Net Lease Group, along with Garrett Colburn, executive vice president, and Townsand Cropsey, first vice president in the Newport Beach office represented the seller in this transaction.

PHOENIX—Fenix Development has sold 3.88 acres at The Watermark | Tempe to Dallas-based Trinsic Residential Group for $14.7 million. The Cushman & Wakefield team of Brent Moser, Mike Sutton and Brooks Griffith represented the seller, Fenix Development in the transaction. Aura at Watermark, the high-rise apartment tower of The Watermark | Tempe development, will offer 360 luxury apartments. The seven-story building will offer 23 floor plans with units ranging from 582-square-foot studio apartments to 2,282-square-foot penthouses, providing diverse options for a broad range of tenants.

DENVER, CO—Steadfast Apartment REIT III has acquired its sixth apartment home community, Belmar Villas. The 318-unit garden style apartment community, located in the Denver suburb of Lakewood, was purchased for $63.3 million. Belmar Villas includes 17 three-story buildings with one-, two- and three-bedroom apartment homes that average 856 square feet. In-place rents average $1,318 per month and the community is currently 93% occupied.

SAN DIEGO—HFF has secured a $12 million refinancing for Oceanside RV Park, a 138-space coastal asset in the northern San Diego County beach community of Oceanside, California. Working on behalf of the borrower, Pacific Current Partners, HFF placed the interest-only, floating-rate loan through Prime Finance. Oceanside RV Park is located at 1510 South Coast Highway steps from the beach and proximate to Interstate 5 and Routes 76 and 78, providing access to nearby cities in Southern California. The coastal resort community is situated on two parcels totaling 7.37 acres along the famed Pacific Coast Highway. Amenities include a clubhouse, swimming pool, spa, showers, pet area, laundry room, free WiFi, extensive landscaping and full hook-ups for all RV spaces. The HFF debt placement team representing the borrower was led by senior director Zach Koucos and director Chris Collins.

BY THE NUMBERS

(SOURCE: MARCUS & MILLICHAP)

(SOURCE: ABI MULTIFAMILY)

DEALTRACKER

Point Capital. ARA Newmark represented the seller in the transaction and DIG represented itself. DIG has selected

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Middle Market Digest: This Week in Southwest

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