(To read more on the multifamily market, click here.)
SAN DIEGO-Oakwood Mission Valley, a 170-unit multifamily property has been sold by Englewood, CO-based Archstone-Smith for $32.8 million. The sale of the property has an interesting twist to it: the site will be converted to a timeshare resort.
The property's new owner, Redmond, WA-based Cendant Timeshare Resort Group, won out in an aggressive bidding on the class A property, which has previously been operated as apartments and short-term corporate housing. The property had a subset of buyers, according to Scott Davis, a partner with the Costa Mesa office of Chicago-based Moran & Co. Davis and Michael Murphy, also of Moran & Co. were the listing agents.
Davis tells GlobeSt.com the property had "hotel buyers, traditional apartment buyers" and others looking to keep it with its corporate housing structure, along with Cendant's timeshare angle. "We thought there was a chance with any of those (buyers) but the winner was the timeshare group," he adds.
Davis says Oakwood has "unconventional zoning restrictions by the city, dictating that it have a designated number of units available for shorter-term use." Those restrictions drew interests from a variety of potential buyers, including REITs and pension funds. He says interest grew due to an "opportunity to enter into an attractive vacation market with exceptionally low vacancy rates, rising hotel occupancy rates and little other timeshare competition."
Built in 1990, the property will see roughly $17 million in renovations, or $100,000 per unit. Interiors will add stainless steel appliances and plumbing will be replaced. Common areas will also be brought up to luxury hotel quality levels.
Of the 170 units, 58 are one-bedroom and 112 are two-bedroom residences. All the units are housed in a single, four-story building. The units range from 598 sf to 897 sf.
Davis says Oakwood is the first timeshare property sold out of Moran's West Coast office. He adds that Cendant had already picked up two other sites in the San Diego area and had a good understanding of the zoning issues and what it would take to convert the units to timeshares.
Due to his unfamiliarity of the timeshare product type, the deal took a little longer than Davis is accustomed to seeing. "The normal due diligence we see is 30-45 days," he says. "We gave these guys about 60 days, to make sure of the land use questions."
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
