Meta Converts Troubled Complex to Seniors Units

SAN BERNARDINO, CA-Los Angeles-based Meta Housing has acquired a troubled 119-unit apartment complex here called Sunset Cove and plans to work with the city's economic development agency to convert the complex into affordable seniors housing. The total project cost for the conversion is estimated at $18.5 million dollars, according to vice president Tim Steuernol of the West Los Angeles office of NAI Capital, who represented the buyer.

Steuernol tells GlobeSt.com that Meta Housing closed escrow on the property, which is at 830 Lugo Ave. near Ninth Street and Sierra Way, as part of a partnership with the City of San Bernardino’s Economic Development Agency. The seller was 655 Dudley LP, a partnership between Paul Calvo & Co. and Milan Capital Management, which represented itself in the transaction.

“This was a complicated and challenging transaction,” noted Steuernol. “Obtaining local support for the project was critical for the success of the deal. There were several hurdles relating to financing and the property had many physical condition issues, along with vandalism throughout the complex, gang activity, other crimes and property damage.”

During escrow, (which opened on May 21, 2010 and closed on Jan. 14) the San Bernardino City Council voted to have the city’s economic development agency provide a loan to the buyer to purchase the property, which had fallen victim to increasing crime over the recent years. The lengthy escrow was due to financing, Steuernol explains. "The buyer had to obtain a loan from the San Bernardino City Economic Development Agency, and that required approval from city council," he says. "The council voted and approved the loan in early December and the project had a green light from there. There were several projects on the table and this one was selected. Buyer and seller were both aware of the timing from the onset of our deal."

According to Steuernol, the buyer plans to relocate the current tenants, paying 42 months worth of relocation benefits, before completely rehabilitating the property and converting the units to affordable housing for seniors. Meta Housing has retained Overland, Pacific & Cutler of Long Beach, CA as its relocation specialist to work with Sunset Cove tenants and assess their relocation needs on an individual basis. Sunset Cove was 50% vacant at the close of escrow, which improved the buyer’s costs associated with tenant relocation, Steuernol noted.

Originally constructed in phases starting in 1958, the property consists of 108 one-bedroom units, 10 two-bedroom units and one two-bedroom/two-bath unit, with wood frame and stucco construction, carport parking, a pool and management office. The refurbished complex will include a clubhouse, upgraded swimming pool, elevators, new walkways, lighting, security, landscaping and a new perimeter wall.