LOS ANGELES-BRE Properties Inc. has acquired the Jefferson at Hollywood, a 270-unit luxury, class-A multifamily complex in Hollywood, CA, for $120.5 million. BRE purchased the property at a discount-to-replacement cost, and estimates it will produce a 4% operating-income-to-purchase-price yield in the first year.
“This transaction is a component of our strategy to improve the company's portfolio quality by disposing of non-core communities and recycling capital into our high-barrier, infill development pipeline as well as select acquisitions such as Jefferson at Hollywood,” says Constance B. Moore, president and CEO of BRE Properties.
The company is relinquishing non-core and slower growth acquisitions through a reverse like-kind exchange, which it expects to complete by the first quarter of 2014. Earlier this year, for example, BRE Properties shed two value-add multifamily properties in Chula Vista, CA, for $77 million. BRE purchased the Jefferson at Hollywood with capital from the company's revolving credit facility.
The property is located in a resurging Hollywood submarket, which has seen an estimated $4 billion in public and private investments recently. Some of the recent investments include the emergence of the Silicon Strip, a growing tech company and start-up movement in Hollywood, which was discussed at the Hollywood Economic Development Summit 2013. The area has seen quite a bit of multifamily activity this year, as well, including the sale of the Sunset Vine Tower and the new mixed-use development, Millennium Hollywood.
Additionally, the property boasts impressive access to public transportation, including close proximity to the Metro Red Line's Highland subway station and a high walkability rating.
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Kelsi Maree Borland
