LOS ANGELES—CityView has completed its business plan on four value-add apartment buildings bought during the downturn in Los Angeles. The investor sold the four properties, which were originally purchased through its CityView Los Angeles Fund I, in four separate transactions for a total of $141.5 million. The firm recognized the strong market conditions for these types of stabilized investments, and felt that this was an ideal time to sell.
"This is obviously a very hot market for cash-flowing, stabilized multifamily assets in good locations." All of these assets hit that criterion," Sean Burton, CEO of CityView, tells GlobeSt.com. Cap rates have compressed quite a bit in the last three-to-four years. We thought that we would take advantage of the market and the attraction of capital to this kind of product and get the best returns that we could for our investors." Burton declined to disclose the exact returns earned on these properties.
The four assets include Madison Toluca, a 110-unit complex in North Hollywood, which sold for $45.9 million; Riverstone Brookstone, a 250-unit complex in Covina, which sold for $50.2 million; Retreat on Sycamore, a 78-unit complex in Hollywood, which sold for U.S. $31.0 million; and Vista Alicante, a 100-unit complex in La Mirada, which sold for $14.3 million. All four properties were purchased in 2011 and 2012.
The four sales were the last of 13 properties purchased by the firm's Los Angeles Fund I. The four transactions were fully marketed and attracted ample interest from investors. "We brought the projects to market using brokerage firms that we have relationships with, and we got a pretty wide swath of investors," says Burton. "We had private individuals and 1031-exchange buyers interested; we had institutions interested; we had a strategic buyer come in, so we saw the whole array of different buyers interested in these assets."
CityView invested significant capital to update the properties, both interior and exterior. CityView took the assets to market after completing the renovation plan and stabilizing the properties.
In addition to value-add investing, the firm also has several development projects underway through Southern California.
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