Decron Acquires 440-Unit Apartment in Los Angeles Area for $82.5M
- Aug 12, 2014
Chino Hills, Calif.—Decron Properties Corp. has acquired Village Crossing, a 440-unit garden style, multifamily apartment community in Chino Hills, Calif., from Invesco Real Estate for $82.25 million.
“Our investment strategy is to invest in submarkets that are infill suburban areas adjacent to large employment centers, which are supported by strong school districts and attract young families. In Southern California, these markets tend to have high barriers to entry, which shield the existing housing stock from increasing rapidly,” David J. Nagel, Decron Properties Corp.’s president and CEO, tells MHN. “The confluence of these metrics creates the demand for luxury apartments but at a price point renters can afford. Many renters are priced out of the urban core but still earn enough to want the modern amenities offered by Class A communities. Village Crossing fits this box perfectly.”
In fact, according to a recent study by the UCLA Ziman Center for Real Estate, Los Angeles is the most unaffordable rental market in the United States, with 54 percent of renters spending at least half of their income on rent. Decron aims to decrease that burden.
“Ease of access to the major employment centers helps Chino Hills show some very strong demographics. Median household income is just under $100,000 and median home prices are over $550,000,” Nagel says. “While the median demographics skew high, there is still a large portion of the population that earns $50,000 to $65,000 in annual income range. These residents want to live in Chino Hills because of its proximity to employers and the good school district but need an affordable price point to rent at.”
The property is located near the 71 freeway which gives renters easy access to Orange County, San Bernardino County, and LA County employers and located within the Chino Hills School District, which is home to some of the best schools in Southern California.
According to Nagel, the property’s 1980s vintage makes it a ripe candidate for a renovation and the company will invest an additional $9.2 million on substantial renovations to transition the property from a Class B to Class A asset.
Post renovation Village Crossing will include granite countertops, stainless appliances and wood-like-vinyl-plank flooring. The community’s three pool areas will be remodeled to include fire pits, resort-quality outdoor lounge furniture and BBQ grills, and Decron also intends to repurpose underutilized space to create a start-of-the-art, two-story clubhouse, with a 1,500-square-foot fitness center and 1,000-square-foot Wi-Fi lounge and game room.
After renovations are completed, the average rents at Village Crossing will range between $1,350 and $1,750 a month, which conforms to the three-times rent/income multiple for young families with an annual household income between $50,000 and $65,000.
With the acquisition, Decron, now owns and manages a total of 5,155 multifamily apartment units throughout California with another 460 units under development.