MWest Grows Heritage Collection with $100M Buy

The San Fernando Building is one of three properties purchased by MWest Holdings.

LOS ANGELES— MWest Holdings has added three new properties to its Heritage Collection , a total acquisition value of $100 million. The properties in the acquisition include the San Fernando Building in Downtown Los Angeles, the Kingsley in Hollywood and an unnamed asset still under contract in the Wilshire corridor. Like the other assets in the firm’s Heritage Collection, these are historic multifamily properties that need attention. According to the investor, the completed properties will add texture and character to the Los Angeles landscape. “In the last 18 months, we have really been focused on buying these older properties that have a sense of place and character, and that our tenants, especially our younger tenants, seem to love,” Karl Slovin , president of MWest Holdings, tells GlobeSt.com. “We are looking for buildings that are architecturally important. That doesn’t mean that we won’t do a newer deal, but we are more excited, frankly, by buildings that have history and a sense of place. If we can find a building that hasn’t had any love or attention in 30, 40, 100 years, that gives us a lot of room to reimagine it and reinterpret it for today’s renters.” The Kingsley and the Wilshire corridor property are both 1920s buildings, while the San Fernando Building was built in 1907. While these are unique investments because of the age and revitalization strategy, Slovin says that at its core, these are value-add plays. “The Kingsley and the Wilshire corridor piece are real value-add. They haven’t had any work in many years,” he explains. “The San Fernando had a big renovation in 2000, but they really haven’t done much since then. It isn’t a huge value-add play, but for us to compete with properties that are coming out of the ground today in Downtown L.A., we have to have a gym, theater and lounge for your tenants. You can’t compete without those. We plan to add those amenities in each building, but we also plan to renovate the lobby to bring the character.” MWest has a singular vision for each of the properties. The San Fernando building features 22-foot ceilings, original tile floors, elaborate cornice work and spandrel panels. The two 1920s properties are poured concrete. Slovin says that the firm works with a design team to pull original documents about the property and the original vision, and stays true to those guidelines. While these are atypical for value-add investors, there are a handful of other investors that specialize in revitalizing historic properties, like these. As a result, there was competition for these assets. “There are a handful of us that do this and that are willing to work in this arena, which is difficult,” adds Slovin. “You are working in fully occupied and often rent-controlled assets. There are a few folks that are willing to do this here in Los Angeles, but you can probably count them on two hands. We are in competition with those same groups over and over again. We all know each other and so it is fairly friendly competition.” MWest wasn’t necessarily the highest bidder in all of the transactions, but was able to win the deals with a thoughtful vision for each property. This was especially true for the San Fernando Building, formerly owned by Gilmore and Associates . MWest secured debt for the San Fernando Building, $21.6 million through Mesa West , and on the Kingsley through Wells Fargo . These three transactions bring the Heritage Collection portfolio to 18 properties and 1,566 units.