A private multifamily investor has purchased an apartment community in Simi Valley, California for $95 million.
The Landing at Arroyo, which was first built in 2022, comes with 212 multifamily units, costing $448,113 for each one. The property consists of seven buildings on 10 acres and features amenities such as a pool and spa, fitness center, game room, packaging lockers, and co-working space.
Institutional Property Advisors, which serves as a CRE unit of brokerage giant, Marcus & Millichap, procured the undisclosed buyer of The Landing at Arroyo. It also brokered the deal for USA Properties Fund, which was the seller of the property.
IPA spoke highly of Simi Valley’s fundamentals.
“This quintessential, low-density suburban core multifamily asset is poised for substantial growth in a severely underserved market with a flat development pipeline,” Kevin Green, executive managing director of investments for IPA, said in a statement.
“In the last 25 years, just four other multifamily properties of 50 units or more have been delivered in Simi Valley and only one market-rate property totaling 280 units is expected to be delivered in the city over the next five years.”
Plus, the area holds an average household income of $139,000, which makes it tougher to afford home ownership, with the median price of single-family homes sitting at $863,000, according to the CRE firm.
Shopping centers including Sycamore Village, Simi Valley Town Center, and Sycamore Square, are just a short drive away from The Landing at Arroyo.
Generally, across the country, the multifamily asset class has gone through some turbulence. The high supply hasn’t always been meeting the demand.
However, things could reverse, especially in The Golden State. CRE participants are confident in California’s multifamily market re-surging. Of the respondents, 60 percent see multifamily demand outpacing the supply in the Northern part of the state in the coming years. And 57 percent think the same will apply to Southern California.
In addition, the Federal Reserve is expected to start cutting rates after its September meeting. That could help spark some demand in multifamily.