The Hampton at South Bay, a 152-unit Torrance apartment project, has been sold for $28.1 million in a rare real estate deal.
The project, at 20707 Anza Ave., was sold Oct. 21 to Realty Center Management Inc., a West L.A. multifamily investor, in a transaction handled by a Los Angeles County Superior Court-appointed receiver.
The previous owner, an investment group led by JPI West, a unit of Irving, Texas-based multifamily developer JPI, had been in default on its loan with its lenders, a group led by Union Bank of California. The lenders had initiated foreclosure proceedings but canceled them and had the receiver sell the property on its behalf, according to Ron Harris and Greg Harris, Marcus & Millichap brokers who handled both sides of the deal.
“It was the first institutional-sized, court-appointed receiver sale in L.A. County during this cycle,” said Ron Harris, who is not related to Greg Harris.
Michael Fiorina, the court-appointed receiver, said that sometimes lenders seek receivers to handle sales to avoid becoming part of the “chain of title” on a property.
“They were just the lender, and if you own the building it is a potential legal exposure,” said Fiorina, president of Total Cos., a real estate services company based in Koreatown.
The deal for the 156,324-square-foot luxury property, a short drive from the beach, breaks down to $180 per square foot or $184,868 per unit. The apartments were built in 1963 and renovated by the prior owner in 2007; they were 88 percent occupied at the time of the sale.
Dave Mercer, chief executive of Realty Center Management, said his company considers the property a “long-term hold” and will renovate the units as they become vacant. Realty Center Management also plans to do a seismic retrofit.
Greg Harris said that the average rent is nearly $1,900 per month. But Mercer said that rents could be increased once units are renovated.
Union Bank did not return calls for comment.
Sales Update
Back in February, Downtown Properties Holdings LLC, the L.A. developer of the 206-unit Rowan Lofts condo building, held an auction to sell 79 units. The event was designed to spark sales and the developer had warned it might convert the building to rentals if it couldn’t unload 60 units.
Sixty-three units were sold at auction, but it was unclear how many of the deals would close in the tough credit market.
Bill Stevenson, an investor in the downtown L.A. project, said that only about 50 sales closed, but the event jump-started sales at the Fifth and Spring streets development, which opened in March and has avoided a rental conversion.
Downtown Properties has held a handful of other special sales events, including one Oct. 10 that resulted in four more sales. About 35 units are in escrow and about 90 units are occupied, said Stevenson, president of Intelligent Market Systems, an auction software company.
The sales also helped the development entity stay current on payments to lenders Bank of America Corp. and East West Bancorp Inc. Stevenson said that Downtown Properties has paid back $29 million of a $50 million mortgage loan.
“I attributed a lot of the success to the grand-opening auction,” he said.
The auction also has established price points for the units. Sales at the auction ranged from $207,000 for a studio to $534,000 for a two-bedroom penthouse unit. The average sale price broke down to about $400 per square foot, while some units sold in the mid-$300s on a per-square-foot basis.
Chinatown Sale
A 29-unit, partially completed apartment project in Chinatown has been sold for $4.53 million to Super A Logistics Services LLC, the entity of a group of L.A. multifamily investors.
The property, at 700-704 N. Hill St. and 709-711 N. Yale St., was owned by Gateway Business Bank of Cerritos. The sale closed Sept. 30.
The bank took over the property, which is 80 percent complete, in June. The original developer had been foreclosed on by a hard-money lender, which in turn lost the property to the bank, according to broker Michel Hibbert of Charles Dunn Co., who represented both sides of the deal.
The project broke ground four years ago and is finally slated for completion in the spring, Hibbert said. The project will include six one- and 23 two-bedroom units with monthly rents in the $1,200-$1,600 range, Hibbert said. The project comprises a four- and two-story building.
Jeff Bazyler of Super A declined to comment. The bank did not return calls seeking comment.
Staff reporter Daniel Miller can be reached at [email protected] or (323) 549-5225, ext. 263.
