California Buyer Takes Over 185, Class C Units

ARLINGTON, TX-After two sidelined sales, the 185-unit La Joya Apartments has been sold to a Carlsbad, CA investor. Sources say the buyer put up $3.65 million for the repositioning opportunity of a 13-building complex with a 23% vacancy.

Buyer Mark Frederick assumed a $2.8-million loan with three years left on the term with the Cleveland-based KeyBank Corp. to acquire the 1707 New York Ave. property, says John Barker, senior investment adviser with Marcus & Millichap Real Estate Investment Brokerage Co. The assumption and the vacancy “made it a little tougher” to get the class C sale across the closing table, he explains to GlobeSt.com.

“It was not an easy deal even with the right person,” Barker says about a sale that fell apart twice in nine months. “But, it can definitely be a value-add deal. We had a lot of offers and this buyer saw it for what it is and was able to get the deal done.” According to the marketing flier, the pro forma cap rate was 10.89% based on the $3.85-million ask.

La Joya’s units average 752 sf, renting for 74 cents per sf. The near 6.7-acre holding has 111 two-bedroom apartments and a balance of efficiencies, one- three- and four-bedroom units ranging from 500 sf to 1,680 sf. The monthly rents go from $400 to $850. The new owner, investing gain from a 1031 exchange of a multifamily property in his homeport, hired J. Hester Properties Co. in Arlington to manage La Joya.

Barker teamed with Marcus & Millichap’s Christopher Deuillet to broker the sale for Blaaca Management Co. of Denton. According to Barker, the seller is cashing out of the multifamily market.