NorthMarq arranges $16.15 million sale of Buena Ventura Apartments and La Scala Apartments in San Fernando Valley

LOS ANGELES, CALIFORNIA (April 21, 2021) – Bryan Schellinger, managing director and Steven Goldstein, associate vice president of NorthMarq’s Los Angeles investment sales team arranged the sale of two separate multifamily properties containing a combined 55 units totaling $16.15 million. Both properties were located in the San Fernando Valley. 

Buena Ventura Apartments (19 units) is located at 10755 Kling Street in North Hollywood, California. The property is located on the border of the NoHo Arts District and Toluca Lake, a coveted residential enclave. Constructed in 1992, Buena Ventura was comprised of a highly desirable unit mix of one-, one plus loft-, and two-bedroom apartment homes offering nearly one parking space per bedroom in a semi-subterranean garage. Schellinger and Goldstein collaborated with Shane Shafer, managing director of NorthMarq’s Newport Beach office, to represent the seller, a private investor, and the buyer, Xenon Investment Corporation.  

“Buena Ventura was a highly sought-after value-add opportunity given that it was being sold by the original developer and had never been offered for sale since it was constructed in 1992. While Buena Ventura was well maintained, the unit interiors were in near original condition affording Xenon Investments the opportunity to enhance the unit interiors through a strategic renovation, recapturing 35 percent upside over in-place rents,” said Schellinger.

La Scala Apartments (36 units) is located at 7255 Winnetka Avenue, Winnetka, California. The property was constructed in 1983 and the seller had completed an extensive renovation since acquiring the property in 2016. As a result, nearly 60 percent of the units had been revamped, allowing the buyer to continue or further expand upon the improvements already completed by the Seller. NorthMarq represented both the buyer, LCL Capital Investments, LLC and the seller, Montgomery Partners. 

“The Seller of La Scala Apartments had completed an extensive renovation to the unit interiors, building systems, and common areas over the past five years, offering the buyer an attractive in-place yield with additional upside through continued renovations and property enhancements,” said Schellinger. 

Market Overview
Over the last 12-Months, residents have moved out of urban centers and into less dense suburban submarkets due to the Covid-19 Pandemic. As a result, suburban submarkets have outperformed urban submarkets and investors have identified the San Fernando Valley as a key market for future growth given the demand for larger floor plans within low density or residential communities. The San Fernando Valley has typically offered investors higher-yields, yet given the improved operations due to the Covid-19 pandemic, the Cap Rates in the Valley have compressed to yields typically achieved in prime submarkets throughout Los Angeles county.