VP of Marketing, Research and Communications, J.C. Casillas, spoke to GlobeSt.com about the multifamily market. From the article:
The market continues to amaze people…The vacancy only went up 20 basis points in the face of all of this new delivery. I was looking back to the last time that we had huge deliveries in the marketplace, and that was prior to the last downturn.
Read more at GlobeSt.com.
NAI Capital’s Multifamily Market Outlook reports show demand for multifamily housing continued rising in the first half of 2016, absorbing much of the newly completed supply in most markets. The vacancy rates remained low and rents continued to rise in all markets. As more supply enters the market in the second half 2016, multifamily housing fundamentals will moderate in markets with high levels of new construction. Sale transactions, albeit at a lower volume due to limited supply for sale, demonstrated strong demand from investors.
Los Angeles County
- Average asking rental rate registered $1,647 per unit, up 5.2% over last year
- Vacancy increased by 20 basis points over the quarter and the year to 3.5%
- 12,497 units sold this quarter in 960 transactions at an average price of $218,788 per unit, which is 8.8% higher than last year
According to Kevin Kawaoka, CCIM, Vice President, NAI Capital, “The Los Angeles multifamily housing market continues to show strength supported by steady job growth, increasing rents and attractive financing. As cap rates continue to compress and interest rate hikes loom on the horizon, we are in an ideal market for sellers.”
- Average asking rents at $1,770 are up 3.6% from a year ago
- Vacancy ended at 3.6%, up 20 basis points from the prior quarter and up 80 basis points from a year ago
- 1,500 units sold in 71 transactions with average unit selling for $255,490, represented a 7.2% increase from a year ago
Steve Gim, Vice President, NAI Capital said, “The multifamily market continues to show very high demand with little supply due to increased amount of buyers being in the marketplace, including foreign capital. This demand is driven by an abundance of capital with very low interest rates. Cap rates have been compressed to the 4-5% range in Orange County for C-Class product. Investor demand has never been higher, with multiple offers on every apartment building that hits the market. We are also seeing more off market transactions taking place.”
- Average asking rents ended second quarter at $1,204 per unit, a rise of 2.9% over the year
- Vacancy, at 2.8%, held steady over the last quarter and is up 20 basis points over last year
- 3,363 units sold this quarter with an average sales prices per unit of $159,217, up 13% over the year
Senior Vice President, DeLonne Valens with NAI Capital added, “One of the main driving forces fueling this growth in the Inland Empire is the fast paced expansion of jobs. With the tightening of the rental market, sales on Class A and B properties are experiencing compressed cap rates averaging in the 4% cap rate range. Class C properties are also experiencing lower cap rates and higher cost per unit sale prices across the board.”
To access the full Multifamily Market Outlook Q2 2016 reports for Southern California, visit:
NAI Capital Completes $6.6 Million Sale of a Historic Retail Property in Los Angeles’s West Adams Heights Neighborhood
Los Angeles, CA, Tuesday, August 02, 2016 – Senior Vice President Parham Khoshbakhtian with NAI Capital represented the seller Washington-Western LLC on the sale of a historic freestanding 22,400 square foot storefront retail property in Los Angeles’s West Adams Heights neighborhood. The sale price was $6.6 million or $268 per square foot.
The property located 2128-2152 W Washington Blvd was 100% occupied at the time NAI Capital was awarded the listing but was delivered vacant to the buyer as a condition of the sale. It was sold as an investment to an owner-user who plans to occupy the entire building for a senior day care center. The property was built in 1924 and is a single story brick structure siting on a 31,063 square foot land parcel with 230 feet of frontage on W Washington Blvd.
The property is on a prime corner of W Washington and S Oxford and is just one small block off the intersection of W Washington Blvd and S Western Ave. It is in a densely populated market area with over 611,000 residents living within a 3 miles radius.
Khoshbakhtian said, “We are able to obtain a purchase price that was 10% higher than our client’s desired listing price by reaching out to the probable buyers in the market while also proactively working with outside brokers to create a multiple-offer bidding environment. As part of the conditions of the sale, I vacated the fully occupied property and delivered it to the owner-user buyer vacant.”
Anaheim, CA, Tuesday, August 02, 2016 – NAI Capital has completed the sale of a 46,609 square foot lot that consisted of a motel and retail property in Anaheim, CA.
Vice President Steve Liu and Senior Vice President Roger Niez of NAI Capital’s Irvine office in Orange County represented the seller, 99 Motel, LLC. The buyer, Anaheim Express Car Wash LLC, was self-represented. The buyer plans to redevelop a portion of the property into a car wash. Sale price was $3.4 million or $72.95 per square foot.
Located at 924-926 S Beach Blvd – Lyndy’s Motel, the two-story property was built in 1961. It is in a densely populated area along a major thoroughfare on S. Beach Boulevard and W. Ball Road. Strategically located, in a highly visible corner, over 80,000 cars drive by the property per day.
“This location will be an ideal site for Anaheim Express Car Wash as it enables the company to capitalize on the Beach Boulevard Corridor’s huge car traffic,” said Niez. “In today’s competitive environment retailers are jumping at the opportunity to acquire great sites. We had multiple offers – this proved to our client the perfect time to sell,” Liu added.
Hollywood, CA, Friday, July 15, 2016– NAI Capital has completed the lease renewal of a 24,000 square foot creative office in Hollywood, CA. The home of Panavision Hollywood.
Executive Vice President Ian Strano of NAI Capital’s office on the Westside of Los Angeles represented the landlord, Torrance Borders Partners. The tenant, Panavision, was represented by Patrick Amos at CB Richard Ellis and Rich Bright from Jones Lang LaSalle.
Located at 6735 Selma Avenue, the building is a two –story single tenant creative office space building that has been 100% leased to Panavision since its completion in 1995. Located in the heart of Hollywood, the building is within walking distance of numerous residential and retail amenities, including the Hollywood and Highland retail complex, the Roosevelt Hotel and the El Capitan Theatre.
Strano said, “We are excited that Panavision has decided to remain in our building. They have been an exceptional tenant, great to work with and they are an institution in the motion picture and TV production industry.”
Alhambra, CA, Tuesday, June 21, 2016– Executive Vice President Scott Martin with NAI Capital represented the seller City of Alhambra Successor Agency on the sale of Fremont Plaza a 151,000 square foot retail power center. The sale price was $24.8 million.
The property located at 2500 – 2588 W Commonwealth Ave was 100% leased to Toys R Us, Party City, and PetsMart. The sale also included two ground leases to El Pollo Loco and Taco Bell. It was purchased by CTF Development NV as an investment. The site was a former Sears department store built in the 1970’s and renovated in 1995. Fremont Plaza consists of three parcels. The first one includes two independent structures. One, with Toys R Us and Party City. The second is a freestanding PetsMart. El Pollo Loco’s ground lease totals 27,247 square feet and Taco Bell is on a 28,036 square feet. The overall site is 7.4 acres of land.
The property is on a prime corner of Fremont and Commonwealth, miles from the terminus of the 710 freeway. Over 40,000 cars pass the by property daily. Surrounded by other national tenant’s such as Costco, Albertsons and the future site for Lowes. Fremont Plaza sits adjacent to the Los Angeles County Assessor office.
“CFT Development NV, owns other assets in Alhambra and they were the best suited Buyer for the City of Alhambra”, Martin stated. “We had nine (9) offers on the property and had to move quickly to meet the City’s strict timeline to close this sale. CFT Development NV, was a pleasure to work with and very timely in their actions.” CFT Development noted, “This property presented us with great potential for a long term investment, future development and credit worthy tenants that reflected our value.”
Valencia, CA, Tuesday, June 14, 2016– Executive Vice President Yair Haimoff, vice presidents Randy Cude and Steve Body, with NAI Capital represented the seller Marquis Valley View, LLC on the sale of a 9,487 square foot Red Lobster restaurant building. The sale price approached $3.6 million with a 6.85% cap rate.
The property located 27524 The Old Road Valencia, CA was 100% leased to Red Lobster at time of the sale. It was sold to Simonian Family 2008 Trust as a single tenant net leased fee interest investment. The single story building situated on 1.15 acres of land prominently located on Valencia’s Restaurant Row under the iconic Six Flags Magic Mountain / Hurricane Harbor sign adjacent to Golden State 5 Freeway. The property is leased to Red Lobster who has occupied the space since 1986.
Red Lobster began as one seafood restaurant in Lakeland, Florida in 1968 by the company founders Bill Darden and Charley Woodsby and is now the world’s largest casual dining seafood restaurant company. It has over 700 restaurants in the United States and Canada with more than 58,000 employees and generates about $2.5 billion of annual revenue. The company is headquartered in Orlando Florida and has international operations in Canada, Malaysia, Saudi Arabia, the United Arab Emirates, Qatar, Mexico, and Japan.
The property is in a bustling and expanding market area. Almost 400,000 cars per day pass the site per day. The Tournament Players Club and Valencia Country Club are within a very close proximity. Planned developments in the immediate market area include Entrada Gateway Center, a 75 acre mixed-use business park which includes Sunkist Office Campus, retail and residential condos. Newhall Ranch has panned a 12,000 acre residential and business development to include 9 million square feet of retail, office space and 21,000 residential units.
Haimoff said, “This property presented the investor with a great potential for long term appreciation and cash flow. The location of the real estate combined with credit worthiness of the tenant was reflected in the tremendous interest in the property which received multiple offers.”
Great article on GlobeSt.com featuring NAI Global President Jay Olshonsky and chief economist Dr. Peter Linneman.
DeLonne Valens and Tim Steuernol of NAI Capital’s Multifamily Services Group represented the buyer and the seller, Chanslor Street LLC, in this transaction. – See more at: Heartland Real Estate Business
Long Beach, Calif.—The Bascom Group has acquired Rose Villas Apartments, an 18-unit community located at 1207 Rose Avenue in Long Beach, Calif. A $2.7 million sales price equates to $150,321 per unit.
The transaction was the third acquisition under Bascom’s new private capital platform, which is focused on buying smaller, value-add assets in Southern California with accredited investors. Debt financing was provided by CTBC Bank Corp. (USA). Mashcole Property Management has been hired for third party property management. Kevin Kawaoka with NAI Capital represented both sides in the transaction.
The previous two private capital platform acquisitions include a 13-unit community in Los Angeles, and a 38-unit community in Santa Ana, Calif.
See the full article at Multi-Housing News.
“Internet should be like power. It is the first thing that you should bring, not the last. As a building owner, I see far too often that even sophisticated tenants fail to provision their internet service in a timely manner because they don’t realize how far in advance the lead times are. So, I do think that it should be pre-deployed,” says 5×5 Telecom CEO Mark Gittleman.
What do you think about built-in wiring in office or multifamily buildings for included internet service?
Read the full article at GlobeSt.com
Dr. Peter Linneman points to economic growth, housing under production, employment recovery, and the impact on commercial real estate.
SVP DeLonne Valens and VP Tim Steuernol spoke to GlobeSt.com about their deal of an eight-property, 484-unit value-add multifamily portfolio. Valens and Steuernol represented both the buyer and the seller.
“This is exactly what everyone is looking for in the multifamily market right now,” says Steurnol,
“Even though these are c-class buildings with deferred maintenance, these are the buildings that are in demand. People want to add value, and we saw very compressed cap rates on these sales,” says Valens.
Read the full article at GlobeSt.com.