Hollywood Communities Command $24M
- Jun 27, 2017
In a pair of transactions, Vista Investment Group LLC has parted with two Hollywood apartment buildings for a grand total of $23.7 million, netting the company $11 million in profit.
“Both of these properties were well located, urban-core apartment buildings that had tremendous upside in rents, through renovation and general market appreciation,” Jonathan Barach, Vista’s president, told MHN. “Both properties are mostly stabilized and cap rates are very low for this type of product and location.”
The first deal saw the company sell Avondale Hollywood, a 58-unit apartment community, to a private investor for $11.5 million.
Located at 1825 N. Cahuenga, Avondale Hollywood was originally purchased by Vista four years ago, and the complex underwent a comprehensive capital improvement program to reposition the classic 1920s four-story apartment community to better attract Hollywood’s Millennial rental market.
The renovation included improvements to the interiors of the bachelor, studio and one-bedroom apartment units, such as refinishing the hardwood floors, without compromising the original vintage architectural and interior design elements. Upgrades also were completed on the plumbing and electrical systems, and the addition of a new lobby with lounge seating and Wi-Fi.
In a separate transaction, Vista sold Sunset Formosa, a 36-unit apartment community, to another private investor for $12.2 million.
Located at 1522 N. Formosa Ave., between Sunset and Hollywood Boulevards, the 32-year-old property is close by the many of Hollywood’s best known restaurants, shopping and world-class entertainment venues.
Vista originally bought the property in 2012, and invested more than $500,000 to improve unit interiors and the curb appeal of the three-story building. The property is comprised of studio, one- and two-bedroom units feature stone countertops, modern stainless steel appliances and upgraded fixtures throughout.
“Coming out of the recession, Hollywood has seen tremendous growth in tenant demand and investor appeal,” Barach said. “The level of new development for a variety of product types—multifamily, office, retail, hotel—since the downturn has been pretty staggering. When you see a company like Netflix choosing Hollywood as their SoCal beachhead, it speaks volumes to the neighborhood’s appeal and long-term viability as a cultural and entertainment hub.”
According to Barach, the sale of both Avondale and Sunset Formosa is part of the company’s long-range plan to divest of its multifamily assets upon stabilization, and enables it to focus more time and attention on larger opportunities with equity partners.
“Vista is an opportunistic value-add owner and operator. We completed our value-add execution of these buildings, and felt it was the right opportunity to exit the investment,” Barach said. “As is customary, Vista will enter into a 1031 exchange to acquire value-add apartment and office properties along the West Coast. Upleg exchange properties from the sales have already been identified.”
Vista recently acquired assets in San Diego and the San Francisco Bay Area and is in contract to acquire two properties in the Pacific Northwest.