A 26-property multifamily portfolio with 642 units has sold for $102 million.
The Neema Group at Marcus & Millichap Inc. represented the seller, a plastics broker who purchased the units over the past 35 years.
He hired the Neema Group in 2019 to sell five of his properties, dubbed the First Five. The buildings were all in South L.A. and Panorama City.
Mid-City-based Golden Bee Properties purchased the five buildings for nearly $19 million.
After the seller died, the portfolio passed to trustees, who continued efforts to sell off the 21 remaining properties.
The sites were broken into a handful of packages, allowing interested buyers to make offers on individual properties or larger portfolios.
The seller’s Wilmington Portfolio, for instance, consisted of three properties with 62 units in Wilmington. The buildings are located within a mile of each other, near the ports.
The Neema Group said in marketing materials that the portfolio “presents an investor the opportunity to capture over 25% rental upside through renovations when the units turn.”
The Wilmington Portfolio sold for nearly $9 million to a trust.
The seller’s Mid-City Collection, by comparison, was more than twice that size.
It was made up of eight buildings with 175 units.
Neema Group said that portfolio received 18 offers. An undisclosed buyer purchased the properties for $33.5 million.
Another portfolio, dubbed The Armor Collection, was comprised of 10 buildings, with 300 units, in Westlake. The buildings are situated within 2 miles of each other.
The Armor Collection included:
- 733 S. Coronado St.: 24 units
- 1433 Miramar St.: 24 units
- 416 S. Grand View St.: 20 units
- 501 S. Burlington Ave.: 42 units
- 1812 West 5th St.: 40 units
- 512 S. Bonnie Brae St.: 30 units
- 323 S. Burlington Ave.: 10 units
- 1817 West 4th St.: 32 units
- 625 S. Burlington Ave.: 48 units
- 1135 S. Grand View St.: 30 units
Taylor Equities ended up purchasing the Westlake properties for $42 million, according to CoStar Group Inc. records.
A housing shortage in Los Angeles has led to high demand for multifamily housing.
A handful of large multifamily building sales have already been completed this year.
The biggest was the 240-unit Wakaba apartments in Little Tokyo. JPMorgan Chase & Co. purchased the property from Sares-Regis Group for $115.8 million.
Sares-Regis Group also purchased the 169-unit Preston Miracle Mile from Heitman for $86.8 million.
Further east, a joint venture of the Las Palmas Foundation and Reiner Communities purchased the 142-unit Hobart Gardens from an individual for $48 million. The building offers affordable housing for seniors.
In 2019, $9.5 billion worth of multifamily properties sold in L.A., according to data from CBRE Group Inc. That’s up 350% from 10 years prior when only $2.1 billion of multifamily properties sold in the county.
But Covid-19 could put a damper on multifamily sales.
CBRE has forecasted that it will take 12 to 30 months for the commercial real estate industry to recover. Multifamily housing, the real estate company said, will likely take more than 18 months to rebound.
Layoffs and other economic hardships will hurt the ability of some tenants to pay rent, CBRE said. Landlords can receive a 90-day forbearance for federally backed mortgages if their income is substantially impacted.