Watermarke Buys 159-Unit Complex for $48M

Moran & Co. conducted over 50 property tours and received more than 30 offers on the property. "Over the last four months, core buyers have returned to the market and their appetite for acquisitions has been strong," Moran says. "The Gardens at Wilshire Center was a bulls-eye for these core buyers" because of its high product quality and location.

Watermarke was attracted by the opportunity to acquire a core asset in a Southern California submarket with a very limited development pipeline, according to Peter DiLello, director of acquisitions for the privately held Corona-based company, which is internally financed and has closed over $650 million in transactions, all-cash, in the last 36 months. "Our focus as a company is to acquire new product in the best markets in Southern California. The Gardens at Wilshire Center fits squarely within our company's strategic goals," DiLello says.

Moran points out that, for apartment investors, acquiring institutional-quality assets in core Southern California submarkets has been close to impossible over the last decade. Since 2000, there have been only seven deals over 90 units, and less than 10 years old, that have sold along L.A.'s Wilshire Corridor, where Gardens is located.

Dan Chandler of Chandler Partners, the 35-year old development firm that built the property, comments that, "Chandler Partners typically builds properties in urban infill locations. The location is great for the renter and for the investor." Other complexes that Chandler has built along the Wilshire Corridor include Museum Gardens and Detroit Village. Chandler founded Chandler Partners in 1972. The real estate investment, development and construction firm―which has evolved over the past 35 years to include several partners―delivers an average of four to six projects per year with an annual development volume in excess of $100 million.

The class-A Gardens at Wilshire Center complex, which was built in 2008, is located midway between Beverly Hills and Downtown Los Angeles. The 159 units are located in a single, six-story podium-style building with five stories of residential built over 7,955 square feet of ground-floor retail, plus parking. The retail space is fully leased to Comerica Bank, Subway, Salad Farm and 24 Quick.

Apartments at The Gardens at Wilshire Center range from studios to two-bedroom units, with an average unit size of 806 square feet. Each apartment includes a stainless steel or black appliance package, granite countertops, designer maple cabinetry, and a stackable full-size washer and dryer. Community amenities include a resort-style pool and spa, a fitness center, a screening room, and a number of large landscaped terraces and courtyards with lounges, fireplaces and barbecues.