Waterton Acquires 736-Unit Multifamily in Inland Empire

Chicago-based Waterton has acquired Terracina, a 736-unit multifamily community in Ontario, CA, from Bridge Investment Group.

The 41.3-acre property has 46 two-story buildings that include one- and two-bedroom garden apartments, each averaging 874 SF. Waterton is planning to renovate the apartments and rebrand Terracina as Citrine Hills.

The Inland Empire multifamily is situated in the Ontario Ranch master-planned community, which when completely developed is expected to have 16M SF of commercial space, eight schools, a park and 1,000 acres of new public open space.

“The Southern California market has exceptional apartment fundamentals and we were attracted to Terracina for its complexity, size and value-add potential,” said Jeremy Stern, VP of acquisitions at Waterton, in a release announcing the acquisition.

“We look forward to implementing our signature value-add program with in-unit upgrades and amenity enhancements to bring the community in line with competing product in the region,” Stern said.

Renovation plans for the Citrine Hills apartments include vinyl plank flooring, stainless steel appliances, quartz countertops and washers and dryers in all units. Communal amenities include four swimming pools, two Jacuzzis, two fitness centers, two soccer fields, two dog parks and a tennis court.

Terms of the sale were not disclosed. Bridge Investment Group bought the Terracina multifamily from MG Properties Group for $142M in 2016.

Waterton is a real estate investment and property management company with a focus on multifamily, senior living and hospitality properties.

The Inland Empire multifamily market trended up in rental rates, vacancies and construction deliveries in Q1 2022, according a Kidder Mathews market report.

Average asking rents increased to $1,726 in Q1 from $1,696 in Q4 2021, 11.5% higher than Q1 2021. The average price/unit dropped to about $206K in Q1 from $294K in Q4 2021, but still a 28% increase compared to Q1 2021, according to the Kidder Mathews report.

Cap rates increased slightly in the first quarter, rising to 4.7% from the Q4 2021 level of 4.3%. Vacancy rates ticked up to 2.6% in Q1, up from 2.4% in Q4 2021.

Top multifamily transactions in Inland Empire submarkets during Q1 included the $35.3M purchase of Veranda Riverside, a 128-unit multifamily in Ramona, by Interwest Capital Group from FPA Multifamily; the $19.7M purchase of Tahquitz Court Apartments, a 108-unit community in Palm Springs by Vista Pacific from Tahquitz Associates.

The largest multifamily construction project in the Inland Empire is a 1,000-unit development known as The Resort @ Empire Lakes in Rancho Cucamonga.