LOS ANGELES—MWest Holdings has set its sights on the North Hollywood market. The value-add investor is known for targeting emerging Eastside Los Angeles markets, like Koreatown and East Hollywood, and for restoring historic multifamily properties. With KBS Strategic Opportunity REIT as its capital partner, MWest has entered the North Hollywood market with the acquisition of the Lofts at NoHo Commons, a three-story, 292-unit 2007 class-A apartment building, for $102.5 million.
“It is pretty exciting in that neighborhood. One of the things that we like is how active it has become,” Karl Slovin, president of MWest Holdings, tells GlobeSt.com. “We really believe in the future of the NoHo Arts District, given the transit and given the new development. We generally go in and buy 1920s product, and we saw a different kind of opportunity here.”
This is a transition for the company both in terms of the neighborhood and the asset class. “This signals a desire to do larger deals when we can find a deal that has value to be added,” explains Slovin. “We are opportunistic generally and when we can find $100-million plus deals where we think we can create real value, that is where we are going. We are not looking at neighborhoods and saying that we must go into a certain neighborhood. We are looking at neighborhoods that have growth and potential, and that have vitality in them.”
North Hollywood definitely fits that bill. The market has seen tremendous growth in the last few years, and although the Lofts at NoHo Commons was only built a decade ago, MWest says that there is a new tenant demographic. “The tenant base in North Hollywood aspires to be in Hollywood, and this is the first step for them,” Matthew Ellis, an SVP at MWest Holdings, tells GlobeSt.com. “The rents are 10% to 20% cheaper in North Hollywood, but you can be in Hollywood in 10 minutes on the metro. It is very accessible. The neighborhood that has come to be a place where you can come on Friday night and stay all weekend with plenty to do. It is a real community. In our mind, it is one of the best places in the Valley. We do see it as an alternative for tenants that are more value oriented, but who want a real community with a demographic that is similar to Hollywood.”
MWest plans to spend $8 million to renovate both the exterior and interior units at the apartment complex. The property is currently closed off to the public, and MWest plans to open it up to the community. “We are going to do some really interesting things to the outside of the building and add a grand staircase to draw the future tenants into the building and to make it more accessible,” adds Slovin. “I think it is a tremendously exciting vision of a building that isn't living up to its full potential. Given this is 2007 construction, we never thought we would go in and spend $8 million. This is, for MWest, a very aggressive move in North Hollywood.”
MWest hasn't decided its long-term business plan for the asset, but Slovin says that there is definitely potential for a long-term hold with the growth in the market.
LOS ANGELES—MWest Holdings has set its sights on the North Hollywood market. The value-add investor is known for targeting emerging Eastside Los Angeles markets, like Koreatown and East Hollywood, and for restoring historic multifamily properties. With KBS Strategic Opportunity REIT as its capital partner, MWest has entered the North Hollywood market with the acquisition of the Lofts at NoHo Commons, a three-story, 292-unit 2007 class-A apartment building, for $102.5 million.
“It is pretty exciting in that neighborhood. One of the things that we like is how active it has become,” Karl Slovin, president of MWest Holdings, tells GlobeSt.com. “We really believe in the future of the NoHo Arts District, given the transit and given the new development. We generally go in and buy 1920s product, and we saw a different kind of opportunity here.”
This is a transition for the company both in terms of the neighborhood and the asset class. “This signals a desire to do larger deals when we can find a deal that has value to be added,” explains Slovin. “We are opportunistic generally and when we can find $100-million plus deals where we think we can create real value, that is where we are going. We are not looking at neighborhoods and saying that we must go into a certain neighborhood. We are looking at neighborhoods that have growth and potential, and that have vitality in them.”
North Hollywood definitely fits that bill. The market has seen tremendous growth in the last few years, and although the Lofts at NoHo Commons was only built a decade ago, MWest says that there is a new tenant demographic. “The tenant base in North Hollywood aspires to be in Hollywood, and this is the first step for them,” Matthew Ellis, an SVP at MWest Holdings, tells GlobeSt.com. “The rents are 10% to 20% cheaper in North Hollywood, but you can be in Hollywood in 10 minutes on the metro. It is very accessible. The neighborhood that has come to be a place where you can come on Friday night and stay all weekend with plenty to do. It is a real community. In our mind, it is one of the best places in the Valley. We do see it as an alternative for tenants that are more value oriented, but who want a real community with a demographic that is similar to Hollywood.”
MWest plans to spend $8 million to renovate both the exterior and interior units at the apartment complex. The property is currently closed off to the public, and MWest plans to open it up to the community. “We are going to do some really interesting things to the outside of the building and add a grand staircase to draw the future tenants into the building and to make it more accessible,” adds Slovin. “I think it is a tremendously exciting vision of a building that isn't living up to its full potential. Given this is 2007 construction, we never thought we would go in and spend $8 million. This is, for MWest, a very aggressive move in North Hollywood.”
MWest hasn't decided its long-term business plan for the asset, but Slovin says that there is definitely potential for a long-term hold with the growth in the market.
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