High GRM Portfolio Gets Multiple Offers

LOS ANGELES—The sale of a two-property multifamily portfolio with an above average gross rent multiplier generated multiple offers, showing the high demand for multifamily product. The multifamily properties in the portfolio are located in North Hollywood and Van Nuys, and received between six and eight offers each, despite the high GRM of 13.4 and 13.72, respectively. The average GRM in the San Fernando Valley is 12.1.

“There is huge demand in the marketplace, and these were somewhat newer properties, meaning that they are not the 1960s vintage typical in the area,” Warren Berzack, president of Berzack Investment Property Advisors, a multifamily specialty group of Lee & Associates, tells GlobeSt.com. “We marketed the properties for between two and three weeks and had between six and eight offers on each property from a combination of exchange buyers, syndicators and private investors. We picked the buyer because of their financial wherewithal, because they owned several other properties in close proximity and because we determined that they would not play games in terms of coming back and asking for credits or price reductions to remove contingencies.” Berzack represented the seller, an unnamed private investor, and buyer, a private equity investor, in the transaction.