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HOLLYWOOD-Interstate Equities Corp. of Los Altos has paid $14.5million for two apartment complexes totaling 69 units and plans tospend $15,000 per door to upgrade the complexes, according toHendricks & Partners. The sale and the planned capitalimprovements illustrate the growing appeal of the Hollywoodmultifamily market, according to Robin Ossenbeck of Hendricks &Partners, who notes that the deal closed at a cap rate of 3.6%.Theproperties are the 32-unit Mansfield Square at 1318 N. MansfieldAve. and the 37-unit Mansfield Circle at 1229 N. Mansfield Ave.Interstate Equities bought them from JMF Enterprises DevelopmentLLC of Los Angeles."Institutional investors are now discoveringHollywood," says Ossenbeck. She says that Interstate could realizesubstantial upside in rents at the buildings, which the seller hadowned since 1996. Other investors and developers that have enteredthe Hollywood market include Seattle-based Security PropertiesInc., which acquired the 298-unit Serravella apartment complex for$64.25 million and plans further upgrades to the recently renovatedproperty, according to Dean Zander of Hendricks &Partners.Security Properties acquired the asset in partnership withGMAC Institutional Advisors, which owns another property in theimmediate vicinity. Foster City-based Legacy Partners unveiledplans recently to build a new Hollywood multifamily project, a183-unit, five-story apartment complex with 13,000 sf ofground-floor retail space at 7950 W. Sunset Blvd. The project willoccupy a site that is now a parking lot, for which Legacy hassigned a long-term ground lease with the Director's Guild ofAmerica.In nearby West Hollywood, the AvalonBay apartment REITrecently acquired the 82-unit Fuller Martel apartments at 1443 N.Fuller Ave. for $17.5 million. The Fuller Martel, which was 98%occupied at the time of the sale, was sold by an affiliate of BlackRock Realty Advisors.