The seller, Starpoint Properties LLC, originally purchased the asset in September 2001 for $4 million. Just 18 months later, Starpoint has sold the apartment complex to a non-profit, low-income bond operator for $5.5 million.
Constructed in 1968, the property is currently under a HUD contract. It houses 129 apartments, with a mix of one-bedroom, two-bedroom and three-bedroom units.
The purchase and subsequent sale of the Colton property reflects Starpoint's investment strategy of focusing on value-added projects in areas with strong population and job growth. "We are pleased with our exit strategy on this asset because when purchasing it we set a hold period of 36 months and were able to exit in 18 months and achieve a leveraged return in excess of 107%," says Paul Daneshrad, Starpoint's president.
The Colton asset is the latest in a string of apartment properties to change hands in the Inland Empire, as a recent Marcus & Millichap report notes that "sales activity has been brisk, given the strength of the market and more affordable prices." The region's positive performance is expected to last for months to come, as Axiometrics Inc. lists the Inland Empire as one of the markets with the best prospects for recovery in 2003-2005.
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