Marcus & Millichap has arranged the sale of four Southern California multifamily properties totaling $67.7 million. All deals were 1031-tax exchange transactions and they received almost $28 million in acquisition financing. Tyler Leeson, senior managing director investments in Marcus & Millichap’s Newport Beach office, along with Senior Associate Drew Holden worked on behalf of the sellers and procured the buyers. The properties included in the portfolio are:
- the 35-unit Adelphi Apartments in Anaheim
- the 70-unit Franciscan Apartments, also in Anaheim
- the 72-unit Ocean Breeze Village in Oceanside
- the 62-unit Terra Oceanside, also in Oceanside
According to Yardi Matrix data, Franciscan Apartments traded for $18.6 million, with the selling price subject to a $12.7 million loan held by First Foundation Bank. Ocean Breeze Village changed hands for $22.7 million. “With the proper execution, 1031-tax exchanges can allow owners to use built-up equity to trade into larger or higher quality properties, increase return on equity and defer payment of capital gains taxes,” said Leeson, in prepared remarks.
Financing specifics
After being involved in the sale of the 84-unit Vio Costa Mesa in Orange County a few weeks ago, Senior Managing Director of Capital Markets Michael Derk and Associate Director Nick Gray, both with Marcus & Millichap Capital Corp., arranged $17.5 million in acquisition financing for Adelphi and Franciscan as well as a $10.5 million acquisition loan for Terra Oceanside.
The debt placement was structured with a five-year term and two years of interest-only for the first loan and a seven-year term and three years of interest-only for the second one. “We locked in the interest rate on all of the deals for 120 days, which is a major exception in the current marketplace and we leveraged our strong track record and large volume of business over the years to negotiate lower than market spreads with the lender,” said Derk.
Images courtesy of Yardi Matrix and Google Street View
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