204-Unit Sale Marks Rare Downtown Deal

LOS ANGELES-The $62.5 million sale of the 204-unit Canvas L.A. apartments in Downtown L.A. represents one of the few new complexes in a market with high barriers to entry, according to brokers from CB Richard Ellis. The property is a newly built complex at 138 N. Beaudry Ave. that LaSalle Investment Management has acquired from Phoenix-based Alliance Residential Co.

"The Downtown L.A. multifamily market has been largely built-out with very few development opportunities left for investors," said Laurie Lustig-Bower, a CBRE executive vice president in the company's Beverly Hills office. "This new building enjoys the barriers to entry for future development and the high-end, urban design, combined with projected occupancy and rental growth in the submarket, helped drive interest and ultimately, a very strong price for this asset."

Lustig-Bower, along with first vice president Adrienne Barr and senior associate Kadie Presley of Team Lustig-Bower in the Beverly Hills office, were part of a CBRE team that represented the seller in the transaction, including Tyler Anderson and Sean Cunningham of the Phoenix office.

The sale ranks as the largest multi-family sale in the Downtown Los Angeles submarket in 2010, according to CBRE.

Prospects are positive for the Downtown L.A. apartment market, according to forecasts from CBRE Econometric Advisors, which foresees a 2.9% occupancy growth in Downtown L.A. from 2010 to 2013, and 2.9% annual revenue growth through 2015. In a recent report titled "The Rental Decade," CBRE Econometric Advisors said, "The US economy and housing market are slowly coming out of a deep slump and there is a good chance that a combination of improving household growth and a steady or falling homeownership rate will produce the strongest growth in rental demand since the 1980s."