SANTA MONICA, CA—A local investor has purchased a rare generational multifamily property on Second Street in Santa Monica, with plans to renovate and reposition the interior units as they turn. The seller was the original owner of the property, which was built in 1969.

“The seller was the original builder and owned the property for many years,” Tony Azzi of Azzi Advisors tells GlobeSt.com. “He came to the point where most of his original investors had passed away and he was dealing with their grandkids. He was getting older as well, and could no longer wanted to manage the property.” Azzi represented the buyer and the seller in the transaction along with George Azzi of Azzi Advisors.

Located at, CA, the property has never been on the market before and has not undergone significant renovations since the property was built. However, it was fully occupied at the time of the sale. “We didn't bring the property to market. The buyer had purchased a three-property portfolio in Brentwood late last year, and wanted to purchase this property as well because of the location and the large unit size,” says Azzi. “They plan to upgrade the units as tenants vacate, modernizing the property and increasing the rents to market rate.”

Azzi explains that the renovation process could take years because the property is rent controlled, and tenants don't leave often. He didn't have any information on the amount of capital the buyer plans to invest, but says that most two-bedroom apartments cost $30,000 for a full renovation. The buyer purchased the property for $6.3 million.

Multifamily properties rarely trade hands in Santa Monica, as owners tend to hold the properties for years. When multifamily properties do come on the market, they yield strong interest from investors. One similar property on Ocean Ave. recently traded hands and generated thousands of interested parties. “The Santa Monica market is highly desired, especially when you get closer to the ocean. Demand is strong from both investors and renters, which has pushed the rents up dramatically,” says Azzi. “Because the demand is high and the inventory is very low, there is plenty of capital to purchase available product in Santa Monica.”