West Hollywood-based Sunset Group has added a luxury apartment high-rise in downtown Long Beach to its portfolio in a rare deal for the city.
Sunset paid $132.9 million for the 17-story, 223-unit waterfront complex called Current, according to data from real estate services firm Jones Lang LaSalle.
The property opened last year as thwe first luxury high-rise apartment complex to be constructed in Long Beach in more than 50 years, according to its developers. The price comes to about $596,000 a unit.
The sale is strikingly different than most in Long Beach, where high-rises with expensive price tags aren’t the norm. Finding a comparable deal requires looking outside of city boundaries to more upscale communities.
A 215-unit apartment complex in coastal Rancho Palos Verdes fetched $105.5 million, or $491,000 a unit, in May 2016. Up the coast in Marina Del Rey, the 244-unit Stella Luxury Apartments sold for $167 million, roughly $686,000 a unit, in 2013.
Sunset last week confirmed its deal, which JLL said closed in July.
Westchester-based Anderson Pacific, San Diego-based Ledcor Properties Inc. and Canada-based Qualico Developments Inc. developed the 17-story, 223-unit apartment tower at 705 E. Ocean Blvd., which opened in July of last year. The $100 million project hit the market in February.
Sunset was formerly known as Studio Management Services when it sold Hollywood Center Studios to Hudson Pacific Properties Inc. for $200 million in February.
“The Current was one of several core acquisitions we targeted for 2017 after the sale of our L.A.-based film studio,” Sunset co-owner JL Singer said in an email. “We intend on owning the Current for the long term as we see the city of Long Beach as having tremendous growth potential and believe it is in the midst of a long-awaited renaissance.”
The family-owned real estate investment group said it is anticipating more acquisitions in the Class A apartment and office building sectors.
The Current can lay claim to Class A, with studios and one- and two-bedroom apartments renting from $2,315 to $6,190 monthly. Amenities include a swimming pool, dry cleaning, pet spa and fitness center. The complex also has a 10,000-square-foot plaza and 6,150 square feet of retail space.
Recent national reports have suggested the recent hot run for apartment properties – marked by steady hikes in average rents in the past five years or so – might be reaching a plateau.
That doesn’t seem to be holding back high-end development in Long Beach.
The Current is part of a two-tower project, with the companion 35-story tower expected to break ground this year. Anderson Pacific, Ledcor and Qualico remain partners on the second phase.
Luxury residential real estate broker David Kramer, president of David Kramer Group in Beverly Hills, said the sale could invite more investment in Long Beach residential developments.
“Like every big sale, it seems to give investors the confidence to go in and put the big money in,” Kramer said. “When you see someone go into Long Beach and pay, it’s because they have a plan to reimagine it, and they will.”
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