Koreatown, an affordable residential market for downtown L.A. and Hollywood office workers, has lately proved hot for multifamily investors.
Last week the Esquire, a large apartment complex located just outside the bustling center of Koreatown, sold for more than $22.6 million.
Roberts Co., an L.A. investor that owns and manages apartment buildings across the Westside, snagged the property in an off-market deal from Corona real estate investment company Watermarke Properties Inc.
The 117-unit property, at 274 S. La Fayette Park Place, sold for almost $193,600 a unit. Re/Max Commercial agent Michael Koshet said his client, the seller, considered it a great price for the rent-controlled building.
“It took me eight months to convince the seller to sell, but when he decided to finally do it, he got three offers on the table right away,” he said. “If I’m not mistaken, that’s one of the highest prices per unit for a rent-controlled building in Koreatown.”
The apartment complex, built in 1972, consists mostly of one-bedroom apartments, with several two-bedroom units and studios mixed in. Rents for the one-bedroom units average about $1,300 a month.
Koshet said about 30 percent of the apartments and all the common areas in the building were renovated before the building sold, leaving room for further renovation and rent growth in the future.
“The buyer saw the potential to renovate the other 70 percent of those units,” he said. “It really was a value-add play.”
Dario Svidler, a broker for Triad Realty Group, represented the buyer in the deal.
Friendly Village, a nearly 19-acre mobile-home park in Long Beach, traded hands last month for $23 million.
Sold by a Southern California partnership named for the park, the property, with 184 doublewide manufactured homes, sold for about $125,000 per hookup space.
The buyer was another Southern California partnership named for the park.
Friendly Village, located atop a former landfill at 5450 N. Paramount Blvd., was built in 1970 and has amenities including a swimming pool and spa; laundry facilities; and a clubhouse with office, kitchen and recreation room.
Briana Barbier, a broker with Marcus & Millichap who represented both buyer and seller in the deal, said that aside from environmental issues related to the landfill, the deal went smoothly.
“The community is located within a strong rental market and receives all city services,” she said. “There is no rent control in this market and the new ownership is expected to realize some upside in rent growth.”
As large parcels become more and more difficult to come by in Los Angeles, mobile-home parks might prove an overlooked, affordable alternative for developers.
Richard Close, a partner with Santa Monica real estate law firm Gilchrist & Rutter, said he thinks developers who
previously relied on redevelopment agencies to assemble large swaths of land might soon start to look to California’s more than 1,500 manufactured
“Decades ago, mobile-home communities were developed as temporary uses in the middle of nowhere, but now that nowhere is prime for developers to take advantage of high-value parcels of land,” he said. “The value of these properties as mobile-home parks are usually substantially less than their land value.”
L.A. real estate investment company Trion Properties earlier this month bought a 16,700-square-foot mixed-use property in Malibu for $5.75 million, or about $344 a square foot.
Trion acquired the property, at 28955 Pacific Coast Highway, from Grant Armand, a real estate investor who had owned the building and occupied the majority of its office space since it was first built in 1987.
The property, which consists of about 6,700 square feet of ground-floor retail and 10,000 square feet of office space, was leased to Malibu Gym and several month-to-month office tenants at the time of the sale.
Max Sharkansky, a principal with Trion, said the firm plans to update and reposition the property to get higher rents, which he expects could be up to $4 a square foot a month for the retail space and $3.25 a square foot a month for the office space.
“This was a rare opportunity to acquire frontage on the Pacific Coast Highway in Malibu, which is an ultrahigh-barrier-to-entry market,” he said.
Trion hired Neal Golub to lease the retail space and Matthew Perlmutter for office space, both of CBRE Group Inc.
Staff reporter Bethany Firnhaber can be reached at email@example.com or (323) 549-5225, ext. 235.
For reprint and licensing requests for this article, CLICK HERE.