
232 Union Place
LOS ANGELES-Buyers have paid $5.2 million for two apartment complexes totaling 80 units in two distress sales that closed recently, according to Brent Sprenkle of Hendricks & Partners, who was the listing agent for the properties. In one of the deals, a locally based investor who owns other properties in the area has acquired a 50-unit apartment complex at 232 Union Place for $3.75 million. In the other, a locally based investor acquired a 30-unit complex at 1117 S. Westlake Ave. in an REO sale.
According to Sprenkle, 10 offers were submitted on 232 Union Place after 149 prospective buyers reviewed the marketing materials. He describes it as a distressed sale that sold on par with the loan.
"The property was in escrow on four separate occasions," Sprenkle said. "The first buyer that had the property in escrow later came back to purchase it at a lower price. One buyer canceled because of the condition of the property and the other canceled based on difficulty in obtaining financing."

1117 S. Westlake Ave.
The closing price works out to a cap rate of 8.51% cap rate. "Even if some of the higher rents were lowered and the expenses were increased it is no less than a 7.5% cap rate," Sprenkle said. The deal closed at a 6.48 GRM, with average rent at $865 for one-bedroom units and $1,093 for two-bedroom units.
Sprenkle says that the property, which was built in 1915, will provide the buyer with an excellent cash flow. It is of concrete construction, contains all one- and two-bedroom units and has an attached parking lot. "However, similar to most older properties, it does need some mechanical upgrading," he adds. The seller was a partnership of two LLCs, with most of the investors from Los Angeles.
The complex at 1117 S. Westlake, which was sold by a Northern California bank, generated 11 offers ranging from $925,000 to $1.55 million after 52 buyers reviewed marketing materials. Twelve buyers came out to tour the property, which was built in 1928, and most "went through almost every unit in the attempt to write non-contingent offers," Sprenkle says.
"Six of the offers had no contingencies and very short closings," Sprenkle says. "The bank elected to accept an offer for $1.45 million that was all cash with no contingencies and a 10-day close."
The sale closed at a 6.64% cap rate, lower than it otherwise would have been because the deal included a lease for an adjacent parking lot, according to Sprenkle. The GRM at close was 6.55, with an average rent of $613 for the units, all of which are studios.
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