LOS ANGELES—Sares-Regis has purchased its first apartment community with its value-add multifamily fund II. The fund purchased the Vista Pointe Apartment Homes, a 216-unit apartment community in Covina, from TIAA-CREF. The purchase price of the property was not disclosed, however sources unrelated to the deal tell GlobeSt.com the purchase price was approximately $45.2 million. In an earlier story, the seller's team told GlobeSt.com that the property received significant interest and 14 offers, now the buyer is revealing its business strategy behind the purchase.
"The property is in an excellent in-fill location central to employment, transportation and shopping with a strong community and little land for new competition. Plus, it is one of the newest communities in the market," Bill Montgomery, the fund's chief investment officer, tells GlobeSt.com. "The property had immediate operational upside with implementation of efficient management strategies and offered additional upside opportunity with interior upgrades and amenity improvements."
Located at 1400 Grand Ave. in Covina, the property sits on a sprawling 11 acres with a mix of one- and two-bedroom garden-style apartments. The onsite amenities include tennis courts, pools, spas and two dog parks. The firm plans to implement a value-add strategy to bring the circa 1985 units up to date. "We paid over $200,000 per unit and will invest $5.6 million, or $26,000 per unit in interior and exterior upgrades, including the addition of washer/dryer units in each apartment," says Montgomery.
The community has access to public transit via the Citrus Avenue metro station and has direct access to the 10, 210 and 605 freeways. This is the type of market that the fund typically focuses on, and Montgomery says that we can expect them to make other acquisitions from the fund in this market. "We focus on suburbs of dynamic central cities like Los Angeles.," says Montgomery.
The firm's first value-add fund purchased 1,377 units in California, Washington and Colorado. It launched in 2013.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.