UPLAND, CA-Phoenix Realty Group has acquired the 255-unit Portofino on the Park complex in this city for $29 million. The purchase enlarges the multifamily holdings of the Los Angeles-based investor, which currently owns about 2,500 apartments in the Inland Empire.

Built in 1976, Portofino on the Park comprises 32 garden-style buildings on 11 acres. PRG plans a $2.8-million upgrade to be performed during the next two years.

The high rate of residential foreclosures in the Inland Empire is one factor that makes apartment investment attractive in the region, according to managing director Edward Ratinoff.  The region remains flooded with homes built prior to the 2007 credit freeze, in addition to thousands of homes that have entered the market through foreclosure.

Phoenix is not worried by the threat of so-called “shadow inventory,” or the high number of single-family homes for rent that could undermine the demand for apartments, however.

“Just because a house is for rent doesn’t meant that an apartment renter will immediately opt for a house instead of an apartment,” he says. “A family might want a house, but a single person might prefer an apartment,” he says. “Even if the rent is the same, a single person may not want all that responsibility for maintenance of a single family home,” he adds.

People who have sold their homes or lost them through foreclosure may also become renters at Portofino, according to Ratinoff. “There’s a fair number of people who have lost their homes and still want to live in the area for the schools,” he says.

Access to the nearby Claremont Colleges, located about a mile from the project in neighboring Claremont, is another big draw for Portofino, according to Ratinoff.  Another potential draw, he says, is convenient access to both commuter rail and freeway connections to Los Angeles, Orange County and other points in the Inland Empire.