Starpoint Turns Apartment Gains Into Major Office Buy

Starpoint Properties has had a busy week. Last week, the firm sold two multifamily assets in Upland and West Covina for a combined $122 million, boasting major appreciation of as high as 201%. This week, the firm has traded those gains into one of the largest office assets in Beverly Hills, purchasing a 12-story, 207,400-square-foot property in Beverly Hills for $193 million. The office acquisition is one of the largest acquisitions in the city this year.

Starpoint sold a 259-unit property located at 624 S. Glendora Ave. in West Covina for $74 million, a 43% increase in value. The investor purchased the property in 2014 for $51.8 million. The second property sold is a 232-unit property located at 1334 W. Foothill Blvd. in Upland for $48.25 million, a 215% increase in value. Starpoint purchased the property in 2001 for $15.18 million. “We found value-add strategies through rehabilitation and amenity upgrades that drove the value,” Paul Daneshrad, CEO of Starpoint Properties, tells Globest.com. “For example, we were able to increase rents at Glendora by 30% within 24 months through our rehab plan. Our expectations were met and as long as the macro economy holds up, the assets should perform well.”

The firm moved to dispose of the two multifamily assets to take advantage of the strong pricing. “We sold these assets because there is a small window today where the markets are inefficient in pricing risk,” adds Daneshrad. “The cap rate curve has compressed to historical lows. This gives us a unique opportunity to sell out of class-C assets into class-A at the most efficient pricing we have seen in a decade. Portfolio management and market timing is critical to maximizing our investors returns.”