Huntington Beach, Calif.—Casa Monterrey, a 208-unit apartment community in this coastal city, sold for more than $60.2 million, or nearly $290,000 per unit. Saratoga Capital Inc. bought the property, located at the corner of Warner Avenue and Edwards Street, from a local family office that had owned and operated the asset since 1974.
Marcus & Millichap’s Institutional Property Advisors (IPA) division facilitated the sale. According to Marcus & Millichap’s third-quarter report on the Orange County multifamily market, investors looking to place capital view the area favorably, “as stellar property fundamentals and strong market security encourage equity inflows. Transactions occurred across multiple submarkets and price tranches, indicating a diverse spectrum of demand.”
Moreover, the report noted, intense buyer demand has propelled pricing to unprecedented levels and driven the average cap rate to the mid-4 percent range. Quality properties in the coastal cities can fetch first-year returns in the mid-3 percent area.
“Originally constructed in 1970 and impeccably maintained by previous ownership, Casa Monterrey Apartment Homes has undergone over $4.2 million in upgrades since 2007,” said Joseph Berkson, Marcus & Millichap first vice president investments, in a statement.
“The rare opportunity to acquire an institutionally sized multifamily asset in coastal Orange County with a value-add component allowed us to generate significant interest in the offering from a wide range of investor profiles,” added Stewart I. Weston, IPA executive director.
Berkson and Weston, along with Christopher Zorbas, IPA senior director; Alexander Garcia Jr., IPA senior director; David Sperling, IPA director; and John Montakab, IPA associate director, represented the seller in the transaction. They also procured the buyer.