Seattle Buyer Pays $30M for 188 Units

SANTA ANA, CA-Security Properties of Seattle has added to its Southern California multifamily portfolio with the $30.25-million acquisition of the La Serena Apartments in a deal with a Beverly Hills-based seller, SP La Serena LLC. The property is a 188 unit-complex that the Seattle-based buyer acquired in partnership with Capmark Finance Inc.

Security says that it plans a significant renovation of the complex, which occupies a 7.2-acre site at 727 S. Lyon St., on the border of Santa Ana and Tustin, less than a mile from rail service throughout Orange County. Lonnie Nadal, managing director of acquisitions for Security Properties, says that the acquisition "reflects our strong belief in the solid fundamentals of the Orange County economy."

The La Serena transaction was negotiated by Robin Ossenbeck of the Los Angeles office of Hendricks & Partners, who notes that after the property was fire damaged in 2005, 65 units were subsequently replaced, giving the buyer almost one-third new units. Before the sale, the seller had renovated much of the exterior and some of the units.

With the purchase of La Serena apartments, Security Properties has acquired more than 800 apartment units in Orange County in the past 90 days, Nadal points out. The Security Properties purchase of La Serena Apartments follows its acquisition this summer of the 628-unit Creekside Meadows apartment complex from the Bascom Group of Irvine for $123 million.

In the Creekside Meadows deal, Security partnered with Principal Real Estate Investors and the State of Illinois Public Pension Fund to buy the property. According to Hendricks & Partners, investors see upside in the Orange County 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.