TUSTIN, CA-Seattle-based Security Properties Inc. has partnered with Principal Real Estate Investors and the State of Illinois Public Pension Fund to buy the 628-unit Creekside Meadows from the Bascom Group of Irvine for $123 million. Dean Zander of the Encino office of Hendricks & Partners, who brokered the deal along with Joe Leon in the Hendricks Newport Beach office, tells GlobeSt.com that the deal is one of the largest Orange County apartment complex sales in the past six years.
"Based on the intense bidding competition we experienced, demand from both institutional and entrepreneurial investors remains very strong for well-located, well-amenitized larger communities," Zander says. He tells GlobeSt.com that investors see upside in the market because, as housing affordability decreases and condominium conversions continue to remove rental housing from the market, rents are expected to continue appreciating 4% to 6% annually.
The Creekside Meadows comprise approximately 70 buildings of two and three stories that were 97% occupied at the time of the sale. Bascom owned the property for several years, during which it completed extensive renovations to the interiors and common areas.
The Creekside Meadows consists of four complexes at 13802-13881 Tustin East Dr.: the 232-unit Trabuco Gardens, the 200-unit Aliso Springs, 104-unit Portola Terrace and the 92-unit Park Colina. Amenities include four pools, three spas, a large fitness center, two tennis courts, a tot lot and picnic areas. Units average 815 sf and ranged from 500 sf to more than 1,200 sf, with rents averaging approx $1,250.
The four complexes, adjacent to each other, are just off the Santa Ana Freeway about 10 minutes from the Orange County Airport. Built between 1968 and 1972, they occupy a site of 23.5 acres in an apartment market where Hendricks & Partners cites the occupancy at 96.2% and annual rent growth of 4.7% per year for the past two years.
The unit mix in the four properties includes 56 studios, 384 one-bedrooms, 186 two-bedrooms and two three-bedroom units. Zander says some of the selling points that appealed to prospective buyers, in addition to the properties themselves, included the location near the Irvine Spectrum, the 1.6 million sf of retail and entertainment offerings nearby, the affluent community surrounding the properties and the barriers to entry.
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