Built in 1966, Sunset Villa Apartments consists of 98 two-story buildings with two- and three-bedroom units that average 891 sf. Rents range from $905 to $1,220. Amenities include a learning center, swimming pool, whirlpool, laundry facilities and garages.
Bascom's Director of Acquisitions Jerome Fink tells GlobeSt.com the property was acquired with an institutional partner at an 8% cap rate. The duo assumed an existing loan carrying an interest rate of 6.19%. Fink says the interest rate on the loan is a little above market but is offset by the fact that the state waives real estate and excise taxes for the project because 50% of the units are leased to low-to-moderate income tenants.
Fink describes the City of Waipahu as a blue-collar suburb of Honolulu that is 16 miles from Downtown Honolulu, home of the major financial and industrial corporations in Hawaii. Fink adds that Bascom is looking for other apartment complexes in Hawaii to acquire, but says it's not easy.
"We're looking at other deals but it's tough to buy there," says Fink. "There are probably less than eight or nine complexes that contain more than 100 units because most have been sold off as condos."
Derek Chen, Jerome Fink, and David Kim founded the Bascom Group in 1996. Over the past 48 months, the fund has been an active buyer of Southern California multi-family product, having closed over 8,000 units to date in Los Angeles, Orange, San Bernardino, San Diego, and Riverside Counties. Bascom's apartment program typically seeks value-added properties located in in-fill locations and repositions them by adding extensive capital improvements, increasing rents, reducing expenses and implementing institutional quality property management.
Prior to the apartment push, Bascom acquired approximately 3.5 million sf of industrial product throughout Southern California via the Southern California Industrial Fund, a joint venture with the Magellan Group of Los Angeles. Bascom also recently formed a joint venture with Rushmore Properties LLC of Chicago to purchase and reposition value added commercial properties throughout the U.S. Bascom's parent company is Chenco International Investment Company of Las Vegas.
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