PASADENA, CA—Another multifamily property in Pasadena's Millionaire Row has traded hands. A private investor has purchased South Orange Grove Apartments complex from an entity of City Ventures. Located at 164, 168, 172, 176 and 180 S. Orange Grove Blvd., the property has 20 apartment units. The sale underlines the demand for multifamily properties in the area.

“Like many sellers right now, City Ventures looked to take advantage of the record low cap rate environment created by historically low interest rates and a scarcity of product on the market,” Mike Smith, a principal at Lee & Associates, tells GlobeSt.com. Smith represented the seller in the transaction along with Lee & Associates principal Jim Fisher. “There are very few apartment buildings along South Orange Grove and they trade hands infrequently. This offering gave a buyer the opportunity to purchase a historic trophy asset on the best street in Pasadena,” Smith adds. “The time of year also helped. In the fourth quarter you tend to see more exchange buyers, as was the case with our top two bidders.”

Although properties in the area trade hands infrequently, Orange Grove Circle, a 64-unit nearby property, also traded hands early this week. “These properties are likely exceptions for the area. Both properties were owned by groups with more active investment strategies than your typical Millionaire's Row owner, who characteristically holds onto these assets for many, many years,” says Smith. Because properties in the area rarely come to market, the sales team received tremendous interest. In the end, the property traded hands for $9.5 million, several thousand dollars over the original asking price.

South Orange Grove Apartments was built in the 1950s on the former Millionaire's Row site, which was home to approximately 50 mansions. The interior units average 1,300 square feet and feature wood-burning fireplaces, hardwood floors, crown molding, in-unit washers and dryers and front and rear entrances.

Smith quotes Reis Inc. data to show the healthy multifamily demand in Pasadena. According to this data, multifamily vacancy rates in Pasadena were 3.4% at the end of 3Q14 with annual rent growth averaging 6%. Although this data is for all apartment complexes, not just luxury apartments, Smith says that this is “an indication of the kind of apartment demand the submarket is seeing.”