Harris, who represented the sellers while John Walsh of M&M represented the buyer, tells GlobeSt.com that the new owner can realize substantial upside in the property because rents are 20% or more below market at the three-building complex. The buildings are at 20909, 20919 and 20929 Parthenia St. on a parcel of nearly three acres.
"We had multiple offers because this is a rent-controlled building with below-market rents, which is one of the most sought-after kinds of properties in the apartment market," Harris tells GlobeSt.com. He explains that buyers are in the market for such properties because they know they will be able to raise rents to market when a unit becomes vacant.
By contrast, Harris explains, apartments in non-rent-controlled buildings are often already renting for top-of-the-market prices, so there is less upside potential in some of them.
The Parthenia complex was built in 1964 and is of two-story, wood frame stucco construction. The property was renovated extensively in the past year by the seller, who acquired the complex a little over a year ago. Improvements included new roofing, boilers, plumbing, painting and upgrades to the units.
Harris tells GlobeSt.com the property was 99% occupied at the time of the sale and is in a family neighborhood where occupancy has been running under 3% for some time and apartment buildings tend to have more two- and three-bedroom units than in other parts of Los Angeles.
The three buildings include 11 singles, 62 one-bedrooms, 58 two-bedrooms and four three-bedrooms, with sizes ranging from 275 sf for the singles to 1,025 sf for the three-bedroom units. Rents range from $590 for the singles to $1,150 for one of the three-bedroom units.
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