LOS ANGELES—The multifamily market in the Southwest continues to be strong with healthy investor demand. Some have that demand has moved into markets like Phoenix, which are later in the recovery cycle. See below for multifamily trades and other transactions and news from this week in the Southwest.
BY THE NUMBERS
LOS ANGELES—Net lease activity in the U.S. is down 20.5% for 2016. While the first half of the year saw most of the loss, sale-leaseback volumes nearly doubled and single-asset transactions increased 3.5% year-over-year in the third quarter. Net lease sales are expected to continue to rebound in the fourth quarter, but 2016 should fall short in year-over-year comparisons.
(SOURCE: JLL)
PHOENIX—In Phoenix multifamily, vacancy rates continue to tighten and rents are increasing, all thanks to strong rental demand. The dynamic has led to NOI improvement and has drawn investors to the market, keeping competition for assets high. The average price per unit increased by double digits for the year, pushing down cap rates 30 basis points into the high-5 to low-6% range. Midtown and north Phoenix and western suburbs such as Glendale, Peoria and Maryvale are highly desired. Older properties within residential blocks of Central Phoenix can change hands with cap rates in the 7% range. In the Biltmore area, older 10- to 50-unit properties are purchased with first-year yields generally in the low-6% span, based on age. Luxury properties in the area along the Camelback corridor can trade at initial yields starting near 4%.
(SOURCE: MARCUS & MILLICHAP)
NEW & NOTABLES
LOS ANGELES—Jon Lange has joined JLL's capital markets team as a SVP in the firm's Downtown Los Angeles market. Lange will work with Michael Zietsman, Tom Bohlinger and G. Ryan Smith and will focus on office assets in the region. Lange joins the firm from CIM Group, where he served as Associate VP, where he was directly involved in transactions totaling more than $1.5 billion. Lange began his career in 2007 at JLL as a tenant representation broker in Phoenix. He was the firm's youngest winner of the Top Achiever award.
IRVINE, CA—Patty Bartlett, COO of Resmark Impact Ventures, has joined the Advisory Board of the Center for Real Estate at the University of California, Irvine Paul Merage School of Business. Bartlett is a UCI alumnus with a Bachelor of Arts in Economics and serves as a Planning Commissioner for the City of Irvine.
SAN DIEGO—The OncoSec Facility, Liberty Station and Alexandria's Spectrum Collection, Building I, have all won the local Outstanding Building of the Year Award from the San Diego Building Owners and Managers Association. Judging is based on community impact, tenant/employee relations programs, energy management systems, accessibility, emergency evacuation procedures, building personnel training programs and overall quality indicators. A team of expert industry professionals also conducted comprehensive building inspections.
DEALTRACKER
PHOENIX—A joint venture between Lowe Enterprises and J.P Morgan Asset Management has sold a 175,835-square-foot, class-A office building in the Camelback Corridor area of Phoenix to City Office REIT for $42.6 million. The seller originally purchased the property as part of a portfolio in December 2013. Over the past 3 years, the seller instituted a capital improvement plan, investing millions into the building, as well as an aggressive marketing and leasing program, bringing the property to just over 90% leased at time of sale. The property is located at 5090 N. 40th Street. Jim Fijan and Will Mast with CBRE's Phoenix office negotiated the transaction.
LOS ANGELES—Pepper Lane Properties has acquired the Wilcox Townhome Apartments for $13.8 million from Sierra Wilcox. The property, which was built in 1990, has 26 apartment units. Located at 920 North Wilcox Avenue, the property features 25 two-bedroom units and one studio unit. The property features a fitness center, outdoor-living spaces, a business center, controlled access and 50 parking spaces. The asset is located in Hollywood's Media District, which has been experiencing an influx of art galleries, top restaurants and new office developments over the past several years. Avison Young Principal Peter Sherman, based in Los Angeles, represented the seller in the transaction.
TUSTIN, CA—Sack Properties in partnership with Canyon Partners Real Estate has sold Vio Tustin, a 165-unit garden-style apartment rental community in Tustin, CA, to an unnamed buyer and for an undisclosed price. The sale is the partnership's fifth disposition through the Canyon Catalyst Fund, the CalPERS real estate emerging manager program. The partnership acquired the property in January 2015, and completed a comprehensive property improvement program that included rebranding the community, upgrading common area amenities and improving unit interiors. Vio Tustin sits on 5.4 acres and features excellent access to Interstate 5 and State Route 55 as well as close proximity to two of California's distinguished schools.
LAS VEGAS—Meridian Capital Group arranged $27 million in agency financing for the purchase of two luxury multifamily properties in Las Vegas, NV, on behalf of an affiliate of Angelo, Gordon & Co. The 10-year Fannie Mae loan, provided by Capital One Multifamily Finance, has a spread below 2% over LIBOR and 10 years of interest-only payments, and a floating interest rate that Meridian describes as “exceptional.” Meridian VP Kovi Elkus and Managing Director Seth Grossman secured the funds on behalf of the borrower.
LAGUNA BEACH—A 34,478-square-foot Gelson's Market in Laguna Beach has traded hands for $19.7 million. The property is located at the intersection of Pacific Coast Highway and Wesley Drive in Laguna Beach and is proximate to several area attractions and a number of local and national retailers including CVS Pharmacy, Chase Bank and La Sirena Grill. Montage Laguna, a luxury five-star hotel and spa, is located directly across the street. Glen Kunofsky and Lior Regenstreif of Marcus & Millichap worked on the transaction, along with Kent Williams.
BUILDING BLOCKS
SANTA ANA, CA—SVA Architects with the Oxnard School District has broken ground on the new Elm Elementary School This is Oxnard School District's third new campus to be constructed from the proceeds of Measure “R.” An approximately $20 million project, Elm Elementary School is one of several recent project wins in the education sector for SVA Architects. The new Elm Elementary School will house 600 K-5 students in a two-story building. There will be 25 classrooms: 20 general purpose classrooms, 4 kindergarten rooms, and 1 Resource Specialist Program room. Phase 1 construction will run from January 2017 to June 2018, and will include constructing the new buildings and the parking lot.
LOS ANGELES— Bernards has completed a new 25,146-square-foot, $15.1-million home for the Santa Monica College Technology, Network, and Telecommunications departments. The IT building is a LEED Gold certified new construction/renovation project, and includes a 14,000-square-foot addition and renovation of the 11,000-square-foot existing facility. The overall project involved an addition to the existing Library/Media Center to facilitate technology-related functions and to provide access and reconfiguration capabilities to the existing IT facility. The firm is also under construction on a new $77.4-million, 111,956-square-foot Student Services Building on the SMC main campus. Morris Architects designed both projects.
MESA, AZ—Multifamily developers Housing Trust Group has broken ground on Aviva, a new $63 million, multifamily development in Mesa, Arizona. The luxury gated community, located at 8350 East Baseline Road, will consist of 325 one-, two-, and three-bedroom apartments, a large state-of-the-art clubhouse, a 150-foot resort-style pool, and extensive green space. Monthly rents will range from $1050 to $1500. The developer acquired the 16-acre vacant tract to develop Aviva for $6.5 million, and secured a $47.1 million construction loan from Walker & Dunlop. Construction commenced on Monday and Aviva is slated for delivery in the third quarter of 2018.
LOS ANGELES—The multifamily market in the Southwest continues to be strong with healthy investor demand. Some have that demand has moved into markets like Phoenix, which are later in the recovery cycle. See below for multifamily trades and other transactions and news from this week in the Southwest.
BY THE NUMBERS
LOS ANGELES—Net lease activity in the U.S. is down 20.5% for 2016. While the first half of the year saw most of the loss, sale-leaseback volumes nearly doubled and single-asset transactions increased 3.5% year-over-year in the third quarter. Net lease sales are expected to continue to rebound in the fourth quarter, but 2016 should fall short in year-over-year comparisons.
(SOURCE: JLL)
PHOENIX—In Phoenix multifamily, vacancy rates continue to tighten and rents are increasing, all thanks to strong rental demand. The dynamic has led to NOI improvement and has drawn investors to the market, keeping competition for assets high. The average price per unit increased by double digits for the year, pushing down cap rates 30 basis points into the high-5 to low-6% range. Midtown and north Phoenix and western suburbs such as Glendale, Peoria and Maryvale are highly desired. Older properties within residential blocks of Central Phoenix can change hands with cap rates in the 7% range. In the Biltmore area, older 10- to 50-unit properties are purchased with first-year yields generally in the low-6% span, based on age. Luxury properties in the area along the Camelback corridor can trade at initial yields starting near 4%.
(SOURCE: MARCUS & MILLICHAP)
NEW & NOTABLES
LOS ANGELES—Jon Lange has joined JLL's capital markets team as a SVP in the firm's Downtown Los Angeles market. Lange will work with Michael Zietsman, Tom Bohlinger and G. Ryan Smith and will focus on office assets in the region. Lange joins the firm from CIM Group, where he served as Associate VP, where he was directly involved in transactions totaling more than $1.5 billion. Lange began his career in 2007 at JLL as a tenant representation broker in Phoenix. He was the firm's youngest winner of the Top Achiever award.
IRVINE, CA—Patty Bartlett, COO of Resmark Impact Ventures, has joined the Advisory Board of the Center for Real Estate at the University of California, Irvine Paul Merage School of Business. Bartlett is a UCI alumnus with a Bachelor of Arts in Economics and serves as a Planning Commissioner for the City of Irvine.
SAN DIEGO—The OncoSec Facility, Liberty Station and Alexandria's Spectrum Collection, Building I, have all won the local Outstanding Building of the Year Award from the San Diego Building Owners and Managers Association. Judging is based on community impact, tenant/employee relations programs, energy management systems, accessibility, emergency evacuation procedures, building personnel training programs and overall quality indicators. A team of expert industry professionals also conducted comprehensive building inspections.
DEALTRACKER
PHOENIX—A joint venture between Lowe Enterprises and J.P Morgan Asset Management has sold a 175,835-square-foot, class-A office building in the Camelback Corridor area of Phoenix to City Office REIT for $42.6 million. The seller originally purchased the property as part of a portfolio in December 2013. Over the past 3 years, the seller instituted a capital improvement plan, investing millions into the building, as well as an aggressive marketing and leasing program, bringing the property to just over 90% leased at time of sale. The property is located at 5090 N. 40th Street. Jim Fijan and Will Mast with CBRE's Phoenix office negotiated the transaction.
LOS ANGELES—Pepper Lane Properties has acquired the Wilcox Townhome Apartments for $13.8 million from Sierra Wilcox. The property, which was built in 1990, has 26 apartment units. Located at 920 North Wilcox Avenue, the property features 25 two-bedroom units and one studio unit. The property features a fitness center, outdoor-living spaces, a business center, controlled access and 50 parking spaces. The asset is located in Hollywood's Media District, which has been experiencing an influx of art galleries, top restaurants and new office developments over the past several years. Avison Young Principal Peter Sherman, based in Los Angeles, represented the seller in the transaction.
TUSTIN, CA—Sack Properties in partnership with Canyon Partners Real Estate has sold Vio Tustin, a 165-unit garden-style apartment rental community in Tustin, CA, to an unnamed buyer and for an undisclosed price. The sale is the partnership's fifth disposition through the Canyon Catalyst Fund, the CalPERS real estate emerging manager program. The partnership acquired the property in January 2015, and completed a comprehensive property improvement program that included rebranding the community, upgrading common area amenities and improving unit interiors. Vio Tustin sits on 5.4 acres and features excellent access to Interstate 5 and State Route 55 as well as close proximity to two of California's distinguished schools.
LAS VEGAS—Meridian Capital Group arranged $27 million in agency financing for the purchase of two luxury multifamily properties in Las Vegas, NV, on behalf of an affiliate of
LAGUNA BEACH—A 34,478-square-foot Gelson's Market in Laguna Beach has traded hands for $19.7 million. The property is located at the intersection of Pacific Coast Highway and Wesley Drive in Laguna Beach and is proximate to several area attractions and a number of local and national retailers including CVS Pharmacy, Chase Bank and La Sirena Grill. Montage Laguna, a luxury five-star hotel and spa, is located directly across the street. Glen Kunofsky and Lior Regenstreif of Marcus & Millichap worked on the transaction, along with Kent Williams.
BUILDING BLOCKS
SANTA ANA, CA—SVA Architects with the Oxnard School District has broken ground on the new Elm Elementary School This is Oxnard School District's third new campus to be constructed from the proceeds of Measure “R.” An approximately $20 million project, Elm Elementary School is one of several recent project wins in the education sector for SVA Architects. The new Elm Elementary School will house 600 K-5 students in a two-story building. There will be 25 classrooms: 20 general purpose classrooms, 4 kindergarten rooms, and 1 Resource Specialist Program room. Phase 1 construction will run from January 2017 to June 2018, and will include constructing the new buildings and the parking lot.
LOS ANGELES— Bernards has completed a new 25,146-square-foot, $15.1-million home for the Santa Monica College Technology, Network, and Telecommunications departments. The IT building is a LEED Gold certified new construction/renovation project, and includes a 14,000-square-foot addition and renovation of the 11,000-square-foot existing facility. The overall project involved an addition to the existing Library/Media Center to facilitate technology-related functions and to provide access and reconfiguration capabilities to the existing IT facility. The firm is also under construction on a new $77.4-million, 111,956-square-foot Student Services Building on the SMC main campus. Morris Architects designed both projects.
MESA, AZ—Multifamily developers Housing Trust Group has broken ground on Aviva, a new $63 million, multifamily development in Mesa, Arizona. The luxury gated community, located at 8350 East Baseline Road, will consist of 325 one-, two-, and three-bedroom apartments, a large state-of-the-art clubhouse, a 150-foot resort-style pool, and extensive green space. Monthly rents will range from $1050 to $1500. The developer acquired the 16-acre vacant tract to develop Aviva for $6.5 million, and secured a $47.1 million construction loan from Walker & Dunlop. Construction commenced on Monday and Aviva is slated for delivery in the third quarter of 2018.
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