LOS ANGELES-Tony Solomon & Will James of Solomon Capital Advisors, in association with KW Commercial tells GlobeSt.com that it has completed sale of the Beverly Alvarado apartments, located at 245 N. Alvarado here. The property was on the market for approximately four weeks before going into escrow, Solomon tells GlobeSt.com.
The building was purchased by a group of investors who already owned the existing multifamily assets on either side of the Beverly Alvarado. Those properties had been converted to condominiums for sale, but due to the challenging market, have been leased out as rental units instead, Solomon says.
Solomon tells GlobeSt.com that the seller was New Alvarado Investors LLC, a local group who owns a number of multifamily assets, and the sales price was $7.5 million. The 60-unit multifamily asset was built in 1990 with a mix of one and two bedroom units in four stories over two levels of subterranean parking. The sale price reflected an 8.91 gross rent multiplier, a 6.61% cap rate, $163.50 per gross square foot and a per unit cost of $125,416.66.
The buyer’s purchased the property to reduce their overall per unit cost, “to preserve the value of their existing buildings by controlling a larger share of the rental market in the area,” Solomon tells GlobeSt.com. This transaction also marks a milestone in that the buyers took advantage of the current 10-year fixed-rate Freddie Mac financing below 4.75% with a two year interest only component.
Tinus Sonsma of First Pacific Financial arranged the financing, “The price points of this deal were partly driving by the availability of the extremely competitive interest rates that are out there for qualified buyers,” says Solomon.
Given the location of the Beverly Alvarado between the other two properties owned by the buyers they were a logical choice for this deal but, “they were hesitant to move forward until interest rates dropped by more than 50 basis points during the transaction,” says Solomon Capital Advisors’ James, who has a bullish outlook for the rest of the year. “There’s more activity this quarter. Both buyers and sellers are taking advantage of the low rates,” he says. “Seller’s are able to get a little more for their properties and buyers get an increased actual cash flow return.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
