OC Multifamily Sales Drought Ends with Top Deal of Year

The dearth of large multifamily transactions in Orange County has ended with the most lucrative deal of the year thus far in the county.Salt Lake City-based Bridge Investment Group has purchased a 406-unit apartment complex in Santa Ana for $129.2M. The price for Horizon Apartment Homes, a cluster of two-story buildings located at 2414 North Tustin Avenue, works out to about $318K per unit.The Bascom Group sold the property, once known as the Villas at Tustin. Irvine-based Bascom acquired the campus in 2017 for $94M.Bridge, which is partnering with Ethos Real Estate, has pledged to preserve at least half of the units at the Horizon campus as affordable housing for households earning below 80% of the area median income, the Los Angeles Times reported.The $129M deal is more than twice the total multifamily investment sales volume that Orange County generated in the third quarter. Multifamily investment sales in OC cratered in Q3, dropping to $58.5M from the Q2 total of nearly $568M, a cliff dive of nearly 90%.Only one multifamily transaction in Orange County exceeded more than $5M in value in the third quarter, CBRE reported.The Arbors at Santa Ana, a 160-unit campus, traded for $40.8M. The second-largest deal of Q3 involved the 16-unit Courtyard in Anaheim, which was sold for about $4.8M.The scarcity of lucrative apartment deals coincided with strong market fundamentals in Orange County, which set another record for its average apartment rent in Q3, hitting $2,854.The Newport Beach and South Irvine submarkets topped the leaderboard in Q3 in Orange County with average rents of $3,439 and $3,404, respectively, CBRE reported.The Orange County market saw 1,213 completed units delivered in Q3, with a total net absorption of 1,406. The occupancy rate in OC ticked up to 96.2%.There are more than 5,400 apartment units under construction in OC, with recent deliveries including The Row at Red Hill in Santa Ana, a campus with 1,100 units developed by Greystar.Last month, the Irvine City Council re-zoned the Irvine Business Complex adjacent to John Wayne Airport, opening up the 2,700-acre business district for high-density housing of up to 15,000 units.Irvine joined Newport Beach, Santa Ana and Costa Mesa in overriding an Orange County Airport Land Use Commission ruling which cited noise and safety concerns that deemed re-zoning for housing “inconsistent” with the Airport Environs Land Use Plan for the area surrounding the airport.