Essex Sheds Hollywood Rehab Project

LOS ANGELES—With significant job centers, Hollywood is fast becoming a multifamily hotspot. So, when Essex Property Trust brought The Jefferson, a 270-unit renovation project in Hollywood, to market, investors lined up. The firm sold the project to a joint venture between Redwood Urban and Beverly Pacific for $132.5 million.

The Jefferson has an interesting history. JPI developed it in 2010, and BRE Properties purchased the asset in 2013. Essex then acquired BRE in 2014, and has held onto the property since. “Essex has a lot of exposure in Hollywood, and I think this deal was either targeted for a big rehab job or a sale,” Curtis Palmer, executive managing director at ARA Newmark, tells GlobeSt.com. “They had a reverse exchange, so they sold this in order to buy the other deal.” Palmer represented both Essex and the joint venture buyer in the deal, along with ARA Newmark directors Chris Benton, Jaspaul Kapoor and Chris Tresp.

The property was fully marketed and saw ample interest from buyers excited about the growth in the Hollywood market. “There was a lot of interest. We actually had two higher offers than what we actually sold it for,” adds Palmer, explaining that the other two deals fell through. “The buyer was someone that we knew well, and surety of close is very important and timing of close is very important. The buyer acquiesced all of the seller's demands.”

This is not the joint venture's first run in the market. It has an established foothold in Hollywood and plenty of experience executing value-add business plans. “They own five separate buildings in Hollywood that were all built in the early 90s, and those properties are performing really well,” says Palmer, adding that they plan to invest $5 million in capital to upgrade the unit interiors and common areas. “They are going to make it look more like a 2016 vintage property rather than a 2010 vintage property,” he says.

Office projects, like Columbia Square and ICON have really catalyzed a resurgence in the Hollywood market with new jobs that appeal to millennials. Palmer says that multifamily in the Hollywood market is starting to compete with the Westside markets in terms of investor demand, pricing and rents.

LOS ANGELES—With significant job centers, Hollywood is fast becoming a multifamily hotspot. So, when Essex Property Trust brought The Jefferson, a 270-unit renovation project in Hollywood, to market, investors lined up. The firm sold the project to a joint venture between Redwood Urban and Beverly Pacific for $132.5 million.

The Jefferson has an interesting history. JPI developed it in 2010, and BRE Properties purchased the asset in 2013. Essex then acquired BRE in 2014, and has held onto the property since. “Essex has a lot of exposure in Hollywood, and I think this deal was either targeted for a big rehab job or a sale,” Curtis Palmer, executive managing director at ARA Newmark, tells GlobeSt.com. “They had a reverse exchange, so they sold this in order to buy the other deal.” Palmer represented both Essex and the joint venture buyer in the deal, along with ARA Newmark directors Chris Benton, Jaspaul Kapoor and Chris Tresp.

The property was fully marketed and saw ample interest from buyers excited about the growth in the Hollywood market. “There was a lot of interest. We actually had two higher offers than what we actually sold it for,” adds Palmer, explaining that the other two deals fell through. “The buyer was someone that we knew well, and surety of close is very important and timing of close is very important. The buyer acquiesced all of the seller's demands.”

This is not the joint venture's first run in the market. It has an established foothold in Hollywood and plenty of experience executing value-add business plans. “They own five separate buildings in Hollywood that were all built in the early 90s, and those properties are performing really well,” says Palmer, adding that they plan to invest $5 million in capital to upgrade the unit interiors and common areas. “They are going to make it look more like a 2016 vintage property rather than a 2010 vintage property,” he says.

Office projects, like Columbia Square and ICON have really catalyzed a resurgence in the Hollywood market with new jobs that appeal to millennials. Palmer says that multifamily in the Hollywood market is starting to compete with the Westside markets in terms of investor demand, pricing and rents.