Steven Brombal of Hendricks & Partners, who represented buyer and seller, says the Fountain Valley, CA seller built the complex in 1987 and had owned it ever since. He tells GlobeSt.com that the property is in "a very desirable location" in the western part of Costa Mesa and relatively new in comparison to other apartment complexes in the area.
The seven units include four one-bedroom, one-bath apartments with fireplaces and private yards, plus three two-bedroom, 1.5-bath units, also with private yards. Brombal says the seller is exchanging into a triple-net leased investment outside California.
The buyer will realize a 4.8% cash-on-cash return at market rents, and Brombal sees upside in raising rents. At closing time, monthly rents were $925 to $1,050 for the one-bedroom units and $1,025 for the two-bedroom units, while market rents are $1,050 for the one-bedrooms and $1,225 to $1,350 for the two-bedrooms. The complex was fully leased at closing.
The sale indicates the strong appetite of investors for small apartment complexes, according to Brombal, who says the building sold for full asking price and a back-up buyer was ready with another full-price offer.
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