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NEWPORT BEACH, CA-The 18-unit Eastbluff Townhomes complex has sold for nearly $478,000 per unit at a 3.5% cap rate and nearly $352 per sf, one of the highest priced apartment assets of its size ever in Orange County, according to Steven Brombal of the Newport Beach office of Hendricks & Partners. Brombal tells GlobeSt.com that the property, at 837-871 Amigos Way in the Eastbluff neighborhood, closed escrow at $8.6 million in a deal between two local private investors.

Brombal, who was the listing agent on the property, points out that the seller had taken rents from an average of $1,597 to $2,197 per month at the complex, which was built in 1969 but has only been on the market one other time, in 2004, when Brombal was the listing agent. The complex is located in the heart of Newport Beach, with many units featuring views to Fashion Island, and was designed and built by noted local architect Bill Ficker.

The property was originally constructed on leased land, but Ficker bought the leasehold interest in 1992 and as a result a special land-use restriction was recorded that prohibited condo conversion without renegotiation of the land sales price to the higher valued usage. “Thus, condo conversion is really not a play on this deal, and pricing with respect to the special land use restriction took this into consideration,” Brombal says.

All units are townhouse style patio-homes featuring three bedrooms and either two or two and a half baths. Rents at the time of the sale were $1,950 on unrenovated units to a high of $2,450 on renovated units. Ten of 18 units were fully renovated, and Brombal says that the new owner’s upside arises from approximate attainable 8% rent increases via minimal cosmetic upgrades to the remaining eight unrenovated units and a potential 24% increase by completing the balance of the renovation.

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