Take Redwood City, CA-based Prometheus Real Estate Group's recent purchase of the 292-unit Cascades Apartments in Anaheim Hills for $41.7 million. It took Prometheus six months of searching for property before finding one that they felt would fit well into their portfolio.
"There are a lot of buyers out there with a lot of capital looking for the same properties," says John Millham, director of acquisitions for Prometheus. "This property's the one we liked the most of the ones the looked at."
Although the company owns other properties in the Orange County marketplace, Millham considers this purchase a re-entry into a market the company first entered in the mid-1980s.
With a large portfolio of multifamily and commercial properties, Prometheus considers itself a long-term player in the market. Whether it builds or acquires property for its portfolio, the company believes in holding onto and rehabilitating its assets to get themost bang for their buck.
"We're typically looking at properties we can put into the portfolio and improve the return we get on an on-going basis," he says.
There seems to be no trend in Orange County, Millham says. Each property is bought and sold for a specific reason. Prices paid per unit are increasing as rents go up and vacancies go down.
With plans underway to renovate the Anaheim Hills property, which includes 94 one-bedroom units and 190 two-bedroom units, he expects rents to increase in the neighborhood of 8% to 12% in the next 12 months.
Prometheus manages its own portfolio, which presently consists of 10,000 apartment units and one million sf of office and retail space in California, Oregon, Washington, Utah and Arizona. The company owns and/or operates 1,000 apartment units in the southernCalifornia area alone.
CB Richard Ellis represented the seller, Bear Stearns Joint Venture, in the transaction.
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