Multifamily - Sale

NorthMarq facilitates the sale of two apartment buildings in Los Angeles totaling more than $20 million in November

LOS ANGELES, CALIFORNIA (December 16, 2020) – Bryan Schellinger, managing director and Steven Goldstein, vice president of NorthMarq’s Los Angeles investment sales office arranged the sale of two multifamily properties located in Los Angeles, California. The assets were sold separately yet both communities offered the buyer the ability to enhance collections should existing residents vacate.  

Over the past six months, astute investors have been seeking opportunities where the existing rents are either replaceable or offer modest increases should any of the existing residents move out, essentially limiting their exposure to pandemic related delinquencies or future collection issues. 

“If an investor is comfortable with the going-in yield, and comfortable with their lender’s interest reserve requirements, once they are able ascertain that current collections will either hold or improve should any of the existing tenants vacate, we’re quite confident that we’ll facilitate the sale. Both 7941 Selma and 950 S. St. Andrews Place are great examples of that,” said Schellinger.   

7941 Selma Avenue: The 35-unit community, constructed in 1957, sold for $13.6 million ($388,571/unit and $386 per sq. ft.). The property was sold by a family member of the original developer offering the buyer an extremely rare opportunity to acquire a mid-sized asset on the border of West Hollywood, in a micro-market of Los Angeles where assets of any size rarely become available for sale. The Cap Rate at closing was 2.87 percent.

“The buyer in this transaction has a focus primarily on well-located assets with little to no improvements allowing them a blank canvas to implement their value-add strategy. The Buyer was immediately attracted to the rarity of the offering as The Selworth apartments is the only property larger than 20-units to have sold in this immediate pocket over the last 20 years. Well-located assets with a good “story” have continued to trade throughout the 2020 Pandemic as investors are flocking to stabilized markets to ensure downside protection. This bodes well for our business model as middle-market experts with an emphasis on premier submarkets throughout Los Angeles County,” said Goldstein.  

950 South Street Andrews Place: The 28-unit community, constructed in 1964, sold for $6,895,000 ($246,250/unit and $276 per sq. ft.). After owning the property for more than a decade and completing modest renovations to the unit interiors and common areas over the years, the Seller elected to market the property for sale with NorthMarq as they continue to reposition their apartment building portfolio. The Cap Rate at closing was 3.94 percent. 

““The seller has strategically been repatriating capital to other markets outside of Los Angeles and the sale of 950 South Street Andrews Place afforded the Seller the opportunity to once again capitalize on this strategy,” said Schellinger.  This is the fifth property the duo has sold for the Seller since 2017.

As a capital markets leader, NorthMarq offers commercial real estate investors access to experts in debt, equity, investment sales, and loan servicing to protect and add value to their assets. For capital sources, we offer partnership and financial acumen that support long- and short-term investment goals. Our culture of integrity and innovation is evident in our 60-year history, annual transaction volume of more than $16 billion, loan servicing portfolio of more than $65 billion and the multi-year tenure of our nearly 600 people.