Santa Monica-based VMG Properties purchased the portfolio from an unnamed private investor in Long Beach that had owned the properties since the 1980s.
Stepp Commercial’s Robert Stepp and Todd Hawke represented the seller and the buyer in the transaction.
“Our seller client was a longtime owner of these assets and decided to dispose of the portfolio in order to pursue a 1031 exchange into a single apartment property in Tampa,” Stepp said in a statement.
“As current and proposed California legislation makes apartment ownership more challenging, we are seeing a number of local investors seek to acquire assets in more business- and tax-friendly states such as Florida,” he added.
In a 1031 exchange, investors can defer capital gains taxes by rolling capital gains from the sale of one property into the purchase of another, or vice versa.
The buildings in the Long Beach portfolio are at 1009-1017 E. 2nd St., 1232 E. 2nd St., 1335 E. 3rd St., 1044 E. Appleton St., 1020 E. Broadway, 1026-1040 E. Broadway and 4600-4602 Pacific Ave.
“The new owner of this portfolio is planning to add value by making updates to the unit interiors as well as exterior upgrades,” Hawke said in a statement. “Long Beach continues to be an attractive place for young professionals to live.”
Multifamily assets have fared better than other product types like retail and hotels.
Earlier this year Palo Alto-based Klein Financial Corp. recapitalized the Wilshire Vermont at 3183 Wilshire Blvd. in Koreatown in a deal valuing the 449-unit building at $135 million.
Klein Financial brought San Francisco-based Divco West Real Estate Services in as a joint venture partner, replacing Hearthstone Housing Foundation and CalPers.
In Venice Beach, AvalonBay Communities Inc. sold the Avalon Venice on Rose apartment complex to TA Realty for $65 million. The 70-unit building also has roughly 9,000 square feet of retail space.
Still, in a report released earlier this year, CBRE Group Inc. predicted that average residential rents would fall 8.8% this year and that vacancy rates would rise.
CBRE forecasted the market would recover in 2021 and 2022.
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