AGOURA HILLS, CA—Erzalow Co. has purchased a multifamily property in Agoura Hills, CA, previously known as Archstone Agoura Hills, from a private investor for $53 million. With 178 units, the property is the second largest multifamily property in the Agoura Hills market.

The sales team received 24 offers for the property and more than 250 registered buyers. “We got among the highest interest for this property of any property we have ever marketed. It appealed to the broadest variety of every investor type that we work with: private capital, sponsored capital and institutional capital,” Dean Zander, a broker at Berkadia, tells GlobeSt.com. “Between the size, which was large enough to appeal to institutions and small enough to be within reach for the larger private investors, and the age, being that it was built in the 1980s and basically un-renovated, which gave it plenty of untapped potential, it appealed to a tremendous variety of buyers.” Zander represented the seller in the transaction along with his Berkadia colleagues Vince Norris and Spencer Scott.  

Although the sales team received strong interest, Erzalow Co. won the bid with an attractive price as well as attractive closing conditions that fit perfectly with the sellers needs. “The buyer was a private family office with headquarters very close to the subject, and they had an aggressive time period where they went non-contingent with a sizable deposit and were flexible on the closing date to meet the sellers other obligations,” explains Zander.

The property was built in 1986 and is comprised of 11 two-story buildings on 15 acres with a mix of one-, two- and three-bedroom apartment homes. The property features a fitness and business center, a pool, spa, barbeque area and tennis courts as well as hiking trails. “The seller bought this property in a portfolio and already owned several other assets in the submarket, so they just decided to sell this particular property because they had no debt prepayment issue,” Zander says about their reason for disposing of the property. “They are still active owners and big believers in the market; they just had enough consecration there, so it was a good time to peel off the one asset and keep the larger ones that they already had. It was more of a strategy than market conditions.”

The buyer will rebrand the property as Lexington Apartment Homes and plans to renovate the common areas and interior units to take advantage of rising rents in the submarket, a market condition that fueled interest in this property. “That value-add market is back in full force,” says Zander. “Most of the properties that we are selling here are similar to this asset in that the newest leases being executed are as much as 8% to 10% higher than the leases for the same unit in the same condition 12 months earlier. You have outstanding rent growth in the absence of any capital improvement, so the thought on these 80s and 90s properties is that if someone were to roll up their sleeves and invest $10,000 per unit in upgrades, they could not only enjoy that 8% rent growth but and additional figure on top of that.”