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COSTA MESA, CA-The buyer of the 24-unit La Costa Apartments landed a rare deal because multifamily complexes of that size are unusual and generally trade infrequently in this part of the Orange County multifamily market, according to Hendricks & Partners. Steven Brombal of the Newport Beach office of Hendricks & Partners says that the property, at 354 Avocado St., “represents a rare offering of this size in the Costa Mesa submarket.”

The complex, which is located in the popular Westside area, is within walking distance of a host of services and amenities about a block and a half away, Brombal points out. The complex, which sold for $4.4 million, features 16 two-bedroom and eight one-bedroom units, each with a detached garage through gated access.

Brombal represented both the buyer and the seller. He points out that, while the unit interiors “show in average condition without significant updating or renovation,” there is an immediate opportunity to raise rents on the two-bedroom units to $1,350 and the one-bedroom units to $1,095, or about a 4.4% increase, he says.

The sales price reflected a credit that the private buyer received for two building structure roof replacements, exterior paint and significant termite repair work. The sales pricing is net of the credit.

The sale reflects an Orange County apartment market that is “the direct beneficiary” of the slowing single-family housing market and the uncertain condominium market, according to a recent market report on the county by Hendricks & Partners. “With the for-sale market in a state of uncertainty, the rental market is the direct beneficiary,” the report said.

The Hendricks & Partners report pointed out that the mortgage payment on a new condo in recent months would have been nearly 1.7 times as high as the rent for a comparable apartment. As the gap between the cost of renting and the cost of owning gradually widens, “it makes it more difficult and unlikely” that renters will turn into buyers, the Hendricks & Partners report concluded.

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