Rio Properties has shed itself of five multifamily assets totaling roughly $30 million.
Colliers represented Rio Properties, which had managed the assets for more than 25 years and sought a creative tax-efficient retirement strategy, in the sales. The five-property portfolio spans the Los Angeles submarkets of Venice, Del Rey and Marina del Rey, as well as Oakland.
Colliers and Rio Properties worked to exchange three of the five properties into tax-sheltered multifamily funds and transition two into real estate investments trusts.
“These transactions exemplify Colliers’ commitment to providing strategic solutions that go beyond conventional approaches,” Kitty Wallace, a senior executive vice president at Colliers, said in a statement. “We take pride in our ability to understand our client’s unique goals and tailor innovative strategies that deliver tangible results. This successful portfolio transaction is a testament to our team’s expertise and dedication.”
By opting for multifamily contribution funds and real estate investment trusts, Rio Properties was able to minimize tax obligations, eliminate the hassle associated with property management and diversify its investment portfolio, according to Colliers.
The portfolio was acquired by multiple buyers, including Advanced Real Estate and Virtú Investments, both of which Colliers also represented in the sales.
Advanced acquired two Venice properties, located at 1400 and 1500 Venice Blvd., via a contribution fund agreement worth more than $13 million. The newly acquired 40 units will be added to its 11,000-unit portfolio in Southern California.
The company ultimately plans to dispose of the properties via a 1031 exchange – a real estate property swap – to defer capital gains taxes.
“Our plan for ‘The X Fund’ is to gather as many smaller properties as possible, renovate them (if needed) through our in-house renovation company, manage them well and improve their value,” Rick Julian, chief executive of Advanced, said in a statement. “Ultimately, we will sell this portfolio and trade into much larger and more efficient properties.”
Virtú Investments acquired 612 Mariposa Ave. in Oakland via a contribution fund worth more than $10.6 million.
“This is an example of the exciting opportunity that Virtú Evergreen Fund offers sellers who need help navigating the disposition and reinvestment process of legacy assets,” Evan Faulkner, head of acquisitions for Virtú Investments, said in a statement. “Asset owners enter our diversified, professionally managed fund portfolio without the headache and pressure of traditional 1031 timelines.”
The other two properties, located at 4034 Redwood Ave. in Del Rey and 5100 Via Dolce in Marina del Rey, were sold to and will be managed by a real estate investment trust with Ares Management and RBC Capital Markets.