LOS ANGELES-Esprit, a 437-unit multifamily apartment and 227-slip anchorage facility in Marina del Rey, has had 100% of its leasehold acquired for $225 million in a half-cash, half-financed, off-market deal.
Capri Capital Partners, acting on behalf of an undisclosed institutional investor, and Kennedy Wilson teamed up for the acquisition. The five-building apartment complex includes a mix of studios and one, two, three and four-bedroom units available for an average monthly apartment rental of $3,536, or $2.90 per square foot. The property was formerly owned by Esprit One LLC, a partnership owned and controlled by former L.A. City Council person Cindy Miscikowski.
All apartments feature water views, in-unit washer and dryer, nine-foot vaulted ceilings and private patios. The units are mostly split-level townhouse layouts with walk-in closets and stainless steel kitchen appliances. A pedestrian promenade runs alongside the waterfront directly in front of the apartment complex.
Esprit also offers an anchorage facility that attracts expensive yachts and boats. The boat slips offer mariners full utility packages, including separate storage and water activity centers for guest use. The 227 boat slips range from 35 feet to 75 feet and have an average monthly rent of $1,191.
Ken Lombard, partner of investments for Capri, tells GlobeSt.com that the Esprit is “one of the more desirable apartment communities in the city, and we feel fortunate that we've acquired the premier asset in that neighborhood. It's in close proximity to everything you'd want.”
Most of the tenants in the apartments are not boat slip renters, Lombard says. But there are other water activities for them, including kayaking.
Like the majority of Marina Del Rey real estate, the Esprit was obtained in a ground lease arrangement with Los Angeles County. “It's a long-term ground lease with a number of renewables,” Lombard says, adding that there are no plans to allow the property to revert to the county.
Every unit at Esprit has a view of the marina, Lombard says. Despite the heavy construction activity in the area, “there's no ability to build in front of us. We're not impacted by any of the development going on.”
Capri and Kennedy Wilson will move forward immediately with a series of upgrades. The team will invest approximately $5.3 million to reconfigure the new leasing center, improve resident facilities, enhance landscaping and upgrade unit interiors.
“Capri's investment strategy is to actively acquire high-quality class-A properties in high barrier markets with supply-demand imbalances and strong economic, demographic and income trends,” says Lombard. “Esprit is truly an iconic asset that meets our investment strategy and will be highly complementary to our investor's real estate portfolio. We are excited to be teaming up again with Kennedy Wilson to acquire this unique waterfront property."
“Esprit is considered the finest multifamily mixed-use property in Marina del Rey, and an off-market transaction to acquire a property of this size and quality is very rare,” said Kurt Zech, president of Kennedy Wilson Multifamily Management Group, in a statement. “The property was stabilized at 94% occupancy in late 2012 after a lengthy three-year lease-up period, and still has plenty of upside for rental growth in a steadily improving economy.”
Brian Eisendrath and Troy Tegeler of CBRE facilitated financing for the transaction with Fannie Mae.
As previously reported by GlobeSt.com, three key players recently joined the team at Kennedy Wilson.
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