Archway Buys Inland Empire Multifamily for $150M

In the largest multifamily transaction in Southern California to close this year, real estate investment firm Archway Equities has acquired The Paseos at Montclair North, a 385-unit multifamily community in the Inland Empire community of Montclair for $150 million.

For Archway, which has more than $1B in commercial real estate assets under management, including 5,000 apartment units across the Sunbelt, The Paseos represents the firm’s first multifamily investment in California.

JLL marketed the property for the seller, 4914 Olive Street Properties. Archway assumed the accretive in place Agency loan with five years remaining on the term.

In a statement, Archway President Sean Moghavem indicated that recent market shifts have made Southern California an attractive market in terms of deal pricing.

“Somewhere along the way, cap rates between the Sunbelt and coastal markets inverted and select pockets of Southern California should now provide more attractive risk-adjusted returns in the current environment,” Moghavem said.

“We are still very bullish long term on multifamily in the Sunbelt because of its favorable business climate, low cost of living and continued job and population growth,” he said.

“Having said that, we continue to see aggressive pricing that’s not factoring in short-term headwinds such as supply, rising property taxes and insurance costs,” Moghavem noted.

The Archway Equities president said the company is actively seeking opportunities in the Inland Empire, Orange County and San Diego.

The Paseos at Montclair North is located at 4914 Olive Street at the Inland Empire’s eastern gateway to Los Angeles’s San Gabriel Valley. In proximity to Interstates 10 and 210, the property is within walking distance of the Montclair Transitcenter, an intermodal facility providing bus and train service throughout the region.

The Montclair Transitcenter will be the future home of the eastern terminus to the Los Angeles Metro Rail’s L Line serving downtown Los Angeles when completed in 2028. The property also neighbors Claremont McKenna College, ranked as one of the top 10 liberal arts universities in the country, according to US News & World Report.

Encompassing nearly two city blocks, the garden-apartment style community features a unit-mix of studio, one-, two- and three-bedroom Santa Barbara-inspired townhomes built around a central linear park with a concert amphitheater.

Amenities at the complex include two resort-style pool areas with spas and cabanas, a fitness facility, a children’s entertainment suite and a yoga room, conference center, and entertainment lounge. The property was 97% leased at closing.

According to CoStar data, The Paseos is the largest of 546 multifamily transactions to close this year in Southern California; it is only the second transaction to trade at more than $100M.

“With a lot of institutional capital sitting on the sidelines, there are very few firms that would be able to close on a transaction of this size,” Archway Managing Director Sankeerth Pulusani said, in a statement.