BRE Buys 220-Unit Complex for $57M at 5% Cap Rate

Vistas of West Hills

VALENCIA, CA-San Francisco-based apartment REIT BRE Properties has acquired the 220-unit Vistas of West Hills from LNR Property LLC for $56.5 million. The REIT says that the deal closed at a year-one stabilized cap rate of 5.1%.

The property, at 24015 Copper Hill Dr., was built in 2009 and comprises 10 three-story, wood-framed buildings with tuck-under parking on nine acres. BRE cites the location as one of the attractions of the deal, pointing out that the complex is only three miles from two other BRE properties, Pinnacle at Westridge and Bridgeport Coast, providing the company with operational and staffing efficiencies.

Apartment Realty Advisors was exclusive adviser to LNR Property, which was the developer of the project. Principals John McCulloch and Curtis Gardner of the San Francisco office of ARA were the brokers.

Stephen C. Dominiak, BRE’s executive vice president, chief investment officer, added that the Vistas of West Hills was built on the last entitled apartment parcel in the Valencia master plan. The property "is an important acquisition for BRE because it meets our strategy of concentrating capital to optimize operating efficiencies,” Dominiak says. “The combination of supply constraints, potential savings in operating costs, a diverse economy, and easy access to local employment, shopping, entertainment and major freeways make this property a valuable addition to our Southern California portfolio.”

Pool View

BRE cited the employment base as another strength of the market. It pointed out that the local employment base includes companies in the entertainment (Six Flags Magic Mountain); travel (Princess Cruises); health care (Henry Mayo Newhall Memorial Hospital, Quest Diagnostics); film and production (Disney/ABC, Valencia Studios); biotechnology (MannKind); aerospace/defense (Woodward, Textron); and education (California Institute of the Arts, The Master’s College) industries.

During 2010, BRE acquired four complexes totaling 1,037 units and sold four properties totaling 1,530 units, according to the REIT's annual report, which it filed last week. The Southern California properties that it bought included the 194-unit Allure at Scripps Ranch in San Diego and the 500-unit Aqua at Marina Del Rey in Marina Del Rey. The Southern California properties it sold during the year included the 714-unit Pinnacle Riverwalk, the 264-unit Boulder Creek and the 304-unit Parkside Village, all in Riverside.