3-Building Apartment Portfolio

In November of 2019 we executed a 1031 exchange with the sale proceeds from the repositioned 26-unit apartment building at 1030 Magnolia Avenue in Gardena, along with two other partners, into this off-market 112-unit 3-building portfolio, for $21,562,000, or approximately $192,000/unit.  The portfolio consists of 50-units in Lawndale, 44-units in Hawthorne and 18-units in Oceanside.  This acquisition was effectuated with a loan in the amount of $21,100,000, which included a mezzanine loan in the amount of $2,750,000 for the portfolio’s repositioning, which equates to approximately $25,000/unit. 

Filed Under: Properties

2-Building Gardena Apartment Portfolio

We completed the off-market acquisition of two “pride of ownership” buildings in Gardena, located within ½ block of each other, in November 2019.  They consist of a 16­unit and a 10­unit building, with each unit having either a private patio or balcony and a garage or covered off-street parking spot.  The properties are located within 1-2 blocks of Pacific Square (a dominant retail center in Gardena), the Gardena Civic Center, a community pool, a large church and a cute little “pocket park,” all in a quiet residential community.  This area of Gardena is known for its safe neighborhoods, walkable streets, and vibrant mixed-use properties within close proximity to schools, restaurants, shopping and other service amenities, which are highly sought after by millennial renters.

This $5,850,000 acquisition was effectuated with a loan in the amount of $5,750,000, which includes a mezzanine loan in the amount of $909,000 for the portfolio’s repositioning, which equates to approximately $35,000/unit.  We have been re-renting our remodeled one-bedroom units approximately 25% higher than in our acquisition proforma.  

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Raymond Avenue, Gardena

This 27-unit value-add two-story building is built around an interior courtyard with a pool.  It was purchased in September of 2021 for $5,838,000.  This acquisition was effectuated with a loan in the amount of $5,772,000, which included a mezzanine loan in the amount of $945,000 for the property’s repositioning, which equates to approximately $35,000/unit.  

Because of the generous carport parking included in this property, we are currently researching the potential development of up to an additional 6 ADU’s (accessory dwelling units) on-site, which would substantially improve the performance of this asset.  

Filed Under: Properties

Harvard Blvd, Gardena

We purchased this off-market 15-unit pride of ownership building in Gardena in December 2021 for $3,950,000.  This acquisition was effectuated with a loan in the amount of $3,860,000, which included a mezzanine loan in the amount of $512,000 for the property’s repositioning, which equates to approximately $34,000/unit. 

The Owner of this property had owned and lived in this property since 2004.  This property is immediately adjacent to its “sister” 16-unit building which we acquired in November of 2019 and are in the final stages of repositioning.  The Seller was so impressed with how our repositioning of the sister building next door turned out; he offered to sell his property to us.  This property is an ideal repositioning opportunity for us, with its location within 2 blocks of Pacific Square (a dominant retail center in Gardena), the Gardena Civic Center, a community pool, a large church and is immediately adjacent to a cute little “pocket park.”  This area of Gardena is known for its safe neighborhoods, walkable streets, and vibrant mixed-use properties within close proximity to schools, restaurants, shopping and other service amenities, which are highly sought after by millennial renters.

We are finalizing our plans for the property’s repositioning, which will include the creation of shared tenant amenities what can be enjoyed by this property’s tenants, as well as the tenants of our 16-unit adjacent building.  

Filed Under: Properties

Glenway Drive, Inglewood

We recapitalized this 48-unit 62,000 square foot building in Inglewood in December 2021.  This property is an ideal value-add opportunity for us and we will remodel units when normal tenant turnover occurs.  There was over 50% upside on in-place rents at the time of recapitalization.

The property has many amenities including a community pool and is centrally located to metropolitan Los Angeles.  It is within 3-miles of the 298-acre state of the art, SoFi Stadium development, the benefits of which are already being realized by real estate investors throughout the city of Inglewood. 

Filed Under: Properties

Loma Avenue, North Hermosa Beach

For this ground up speculative luxury 2-unit detached townhome development, we partnered once again with Gary Lane of Lane Design Build.  We acquired a 1923 built triplex on March 29, 2017 for $2,00,000.  The lot size of 4,243 square feet allowed us to develop two detached townhomes totaling approximately 5,500 square feet.  These modern coastal plantation townhomes featured 4 bedrooms, 3.5 bathrooms and a home office, with surround views from the 3rd story as well as a rooftop deck with panoramic and ocean views.  The Property is approximately 4 blocks from the beach and within easy walking distance to Downtown Hermosa Beach and local parks. 

 

Both units were sold by September of 2020, at a total price of $5,915,000, resulting in a total return to this partnership of 35%. 

Filed Under: Properties

Magnolia Ave, Gardena

 

In September of 2016 this 26-unit two-story garden style apartment complex was acquired in an off-market transaction for $4,800,000, with $3,463,000 of interest only debt financing at 3.3%.  It is located on Magnolia Avenue, one-half block west of Vermont Avenue and two blocks south of Hustler Casino in Gardena.  

A thoughtful repositioning plan was designed and implemented, at a total cost of approximately $1,373,000. After the completion of our repositioning of this asset it was sold in November of 2019 for $9,300,000.  This represents a total return of approximating 55% over our holding period.  

Filed Under: Properties

17th Street, Manhattan Beach

For this ground up speculative single-family residential development, we partnered once again with Gary Lane of Lane Design Build.  We acquired a 2,017 square foot 1960 built home on August 15, 2017 for $2,650,000.  The lot size of 5,007 square feet allowed us to develop a two-story, over a finished basement, 5,043 square foot luxury single-family residence.  The property is located on a highly sought after cul-de-sac in the American Martyrs neighborhood of the Manhattan Beach Tree Section, with direct access to the American Martyrs field. The property is five blocks to the Beach and one block to Downtown Manhattan Beach. 

This project was completed in mid-2020 and closed escrow on August 21, 2020 for $6,325,000, which equated to over $1,250 per square foot.  

Filed Under: Properties

Compton Boulevard, Compton

This property consisting of a 4,425 square foot medical office building in the city of Compton on 16,000 square feet of land was purchased on May 25, 2017 for $350,000.  Prior to the close of escrow, we negotiated and executed a new 10-year lease with a federally funded childcare provider, which has a net worth in excess of $50,000,000.  

The complete repositioning of the Property was completed in the summer of 2019, at a cost of approximately $450,000, as called for in our lease.  The tenant opened for business in late 2019.  In July 2020, we completed the off-market purchase of the adjacent 3,424 square foot vacant land parcel, at a price of $125,000.  Prior to purchasing this parcel, we executed a lease amendment, which allowed us to increase our NOI on this investment by over 15%.  With nearly all investor equity returned, the property continues to provide our partners with continuing cash flow.  

Filed Under: Properties

Slauson Ave, Los Angeles

This value-add 1961 built 3-story medical office building consists of 14,207 rentable square feet and was acquired on September 22, 2017 for $3,000,000.  When we entered escrow this 6-suite property had two vacancies and one lease expiring.  During escrow we executed two new leases and extended a third.  As a result of our leasing activity during escrow, our lender’s appraisal came in at approximately 30% above our purchase price.  We sold the property in November 2021 for $4,800,000, resulting in a return on equity of over 75% on our holding period. 

Filed Under: Properties
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