LOS ANGELES-The market here for multifamily properties is “very, very, very tight,” according to Danny Monempour, president of Monem Corporation. But there are still some deals to be had, he says.
Monem Corp., a private investment firm that focuses mostly on rent-controlled multifamily properties in Los Angeles County, has just acquired two apartment buildings totaling 44 units for $5 million. The two acquisitions bring Monem up to more than 60 multifamily properties throughout L.A., with a goal of adding 100 units per year, Monempour tells GlobeSt.com.
The two apartment deals are the first of 2013 for the firm, but Monempour claims he has “a couple more under contract.” In a market with five to seven “real competitors” going after the same properties, Monem has targeted seven to eight deals this year, down slightly from 15 last year. The average rent for the apartments in his portfolio is $1300 per month for mostly one-bedroom apartments.
Monempour says the Los Angeles multifamily market is so tight right now that a sense of déjà vu is creeping up. “I'm also thinking (the market) is very similar to 2006,” he says. “Things are heated up again. I think we're potentially setting ourselves up for something similar (to the recent recession) in a couple years. It won't be as bad, and I don't think every single institution will be affected. But now things are trading at 3.5 and 4 caps, and that's not sustainable.”
The two most recent properties acquired by Monem Corp. include 1210 North Berendo St. in L.A., acquired for $2.2 million with financing through JPMorgan Chase. The sale closed at a cap rate of 8%. Brent Sprenkle of Hendricks & Partners represented the seller, a private investor whose name was not disclosed, and Monem. The two-story property includes 28 units, gated parking and is fully occupied.
Monem's other deal was for 939 North Ogden Drive in West Hollywood, which was acquired for $2.8 million and closed at a 5% cap rate. The seller was a private investor that was not named, represented by Ron Harris of Marcus & Millichap. The two-story property includes 16 units and is just south of Santa Monica Boulevard and just east of Fairfax. The property was fully occupied at escrow close. Financing was also by JPMorgan Chase.
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