IMT Thousand Oaks is a 191-unit apartment complex.
LOS ANGELES—An affiliate of Pacific Urban Residential has acquired IMT Thousand Oaks, a 191-unit multifamily complex in Thousand Oaks, from IMT Capital LLC for $67 million. Institutional-quality assets are rare in the Thousand Oaks market; in fact the brokerage team that orchestrated the deal estimates that there are only five “sizable” assets of this quality in the market. To break in, the buyer approached the seller and negotiated the deal.
“This asset was not exposed to the marketplace. It was a direct pursuit by the buyer, and in this case, the seller was open to the concept of the sale. They really saw this as an opportunity to capitalize on the strong market fundamentals and the aggressive capital in the marketplace,” Kevin Green, senior director at Institutional Property Advisors, tells GlobeSt.com. “For the buyer, there are very few assets in this market that would fit an institutional buyer's investment criteria. This was one of five assets that they could potentially own, and the prospect of getting one of those five in a highly coveted market is very low. This was a way to enter the market.” Green represented the buyer and the seller in the transaction along with Joseph Grabiec, a senior director at IPA.
Although Thousand Oaks is a high-barrier-to-entry market where very few properties trade hands and where there are few opportunities for institutional players, the fundamentals and dearth of supply make it a highly desirable market. “It is very rare to get any new projects approved because of governmental barriers; so, there is also lack of a development pipeline in Thousand Oaks,” explains Green. “As a result, there are very few sizable assets. There are only five apartment complexes greater than 50 units that have been built in Thousand Oaks and Westlake Village since 1980. Despite the vintage of this property, it really represents one of the most prime, well-located, sizable assets in the entire submarket. A lot of the older product is being renovated and you can really renovate to a core asset level because you don't have anything to compete with.”
It is unusual for properties of this quality to trade hands, however, likely as the result of market timing, two large institutional-quality assets traded hands earlier this year. That helped the buyer's off-market strategy play out. “Off-market is less likely to occur, but in this case, there was already price discovery because there had been these transactions in the marketplace,” says Green. “That allowed the seller to gauge what market value is without having to go through the process.”
The seller may do a light renovation, but this is more of a long-term hold play than anything else. With no development and strong fundamentals, Thousand Oaks may be one of the top investment markets in all of Los Angeles. “If you look at Thousand Oaks compared to other core markets in Los Angeles, you have arguably better demographics, better schools and better income than any market in L.A.,” says Green. “It is prime real estate in that perspective.” Green's colleague at IPA, executive director Stan Jones, will moderate the “Industry Leaders: A View from the Top” panel on day two of this year's RealShare Apartments conference, taking place Wednesday and Thursday of this week.
Steady gains in the US economy have resulted in net positives for the multifamily sector—will this wave continue for the foreseeable future? What's driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
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Kelsi Maree Borland
