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Friday, May 27, 2022

Hawthorne Multifamily Building Sells for $140M

Century City-based Standard Communities, the housing division of Standard Cos., West Hollywood-based Faring Property Group, the California Statewide Communities Development Authority and the city of Hawthorne have acquired the Millennium South Bay Apartments in Hawthorne for roughly $140 million.

The public-private partnership acquired the 230-unit community from Dinerstein Cos., records show.
The buyers, led by Standard, set aside $17.5 million to support the property, which will be middle-income housing.

“This public-private partnership to create workforce housing will ensure that middle-income families and essential workers can afford to live in a high-quality transit-oriented and mixed-use property, close to their work and many neighborhood amenities,” Chris Cruz, Standard Communities’ managing director of essential housing, said in a statement. “Two-thirds of the units are reserved to those making below $82,000 a year, with one-third reserved for those making at or below $66,000 a year.”

The five-story Millennium South Bay Apartments, located at 12530 Crenshaw Blvd. two blocks from Metro’s Green Line Crenshaw Station, was built in 2021 and has a mix of studio, one- and two-bedroom apartments. The property sits on 2.5 acres and has ground-level retail and restaurant space.

Amenities at the property include a pool, coworking spaces and a fitness center.
“The average single-family home in Hawthorne costs over $900,000, but the average salary for teachers, firefighters, police officers and other essential workers is below $70,000,” Jeff Jaeger, Los Angeles-based co-founder and principal of Standard Communities, said in a statement. “Creating this transit-oriented and mixed-use community for middle-income essential workers will have a huge benefit for the city of Hawthorne.”

Standard and Faring had announced a joint venture in August to create more than $2 billion worth of middle-income housing in California. Both ground-up developments and acquisitions of existing properties to be converted to middle-income housing are part of the joint venture.

The Hawthrone property is the fifth acquired by the joint venture and will be dubbed Standard-Faring Essential Housing.

“Fifty-five percent of renters in Hawthorne spend a third or more of their income on housing,” Jason Illoulain, chief executive of Faring, said in a statement. “Faring is pleased to partner with Standard Communities, the CSCDA, and the city of Hawthorne to make luxury living more affordable to essential workers and middle-income families.”

One of the joint venture’s other recent transactions is the sale of the 349-unit Monterey Station in Pomona purchased in December for $130 million from Clear Capital.
Standard and Faring aren’t the only companies purchasing middle-income multifamily properties.

Long Beach-based Waterford Property Co. has also been active in the sector. Waterford and the CSCDA’s recent acquisitions include a 472-unit apartment complex in Pomona known as 777 Place at 777 E. 3rd St. acquired from Picerne Residential for $149.4 million; a 480-unit property in Pasadena known as the Westgate Apartments at 231 S. De Lacey Ave. acquired for $280 million from Equity Residential; the 216-unit Oceanaire apartment complex at 150 W. Ocean Blvd. in Long Beach acquired for $120 million; the 340-unit Residences at Westgate at 31 S. DeLacey Ave. in Pasadena purchased for $237 million; and the Hudson, a 173-unit property at 678 E. Walnut St. in Pasadena, purchased for $98.1 million.

In these acquisitions, companies like Standard or Waterford act as the project administrator to lower rents for residents with incomes of 80% to 120% of the area’s median income.

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Hannah Madans Welk
Hannah Madans Welk
Hannah Madans covers real estate for the Los Angeles Business Journal. A USC grad, Madans has done work with publications including The Orange County Register, The Real Deal and doityourself.com.

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