Buchanan, PCS Venture Sells CityPlace Complex

LONG BEACH, CA-A joint venture of Newport Beach-based Buchanan Street Partners and Los Angeles-based PCS Development Inc. has sold the 221-unit Premiere at CityPlace apartment project to Denver’s Archstone-Smith Trust. Terms of the sale were undisclosed, but the buyer is believed to have paid in the low $40-million range for the property. The apartment complex is part of a mixed-use new urban village in Downtown Long Beach that city officials and development industry executives have long considered a catalyst for renewal Downtown.Buchanan SVP Brad Sevier, who brokered the sale, notes that Archstone-Smith was willing to buy the apartments before they were fully leased, a sign of the optimism about the project and the Downtown area. The complex was approximately 40% leased at the time of the sale, with rents of about $1.80 per sf. The studio units measure 578 sf, the one-bedrooms from 675 to 750 sf, and the two-bedrooms 1,270 sf to 1,590 sf. The apartments are located at 1 E. Fourth St. and total approximately 200,000 sf. They include studio, one- and two-bedroom floor plans. The project comprises five three-story buildings constructed over ground-floor retail space, with each building attached to above-grade parking structures owned and operated by the City of Long Beach. Besides the apartments, CityPlace includes 450,000 sf of retail and restaurant space. Developers Diversified Realty (DDR) Corp., the master developer of CityPlace, manages the retail component. Buchanan Street Partners advised PCS Development on the formation of the venture, the initial capitalization of the project, a recapitalization during the construction phase that enhanced the capital structure with Buchanan’s own equity investment, and ultimately the sale. PCS Development President Todd Shaw points out that the apartment complex opened with strong leasing despite a down economy and lowest interest rates that encouraged many would-be renters to become home buyers. Archstone-Smith Trust is a REIT that owns 247 apartment properties throughout the US.