IEC Buys CA Workforce Housing for $134M

Surf at 39, a 400-unit property in Huntington Beach, was built in 1972 and includes two swimming pools with spas, a business center and a dog park.

Best Photo of Surf At 39 - 006Institutional fund manager Interstate Equities Corporation (IEC) has acquired Surf at 39, a 400-unit multifamily property in Huntington Beach, Calif., for $134 million. The acquisition was on behalf of the firm’s IEC Institutional Fund III LP, a $200 million commingled fund targeting value-add multifamily investments in coastal California.

The property is located at 16761 Viewpoint Lane, 1.2 miles from the 405 Freeway, and 10 miles from Orange County’s John Wayne Airport. It consists of two- and three-bedroom apartments and townhomes.

Surf at 39 counts as value add, according to the buyer. The property was constructed in 1972. Common amenities include two swimming pools with spas, a business center, a fitness facility, clubhouse, dog park and barbecue area.

The Apartments Will Stay as Workforce Housing

“Surf at 39 will remain a workforce housing community,” said Marshall Boyd, co-president and chief investment officer of IEC.  “Currently, about 80 percent of the units are in their original condition. The units are functional, but we will upgrade them to meet tenant needs, while retaining the property’s position as the best value for the dollar in its class.

“Based on market demand, we will benefit from rising rental rates over time, while continuing to serve the sector of the rental community seeking a non-luxury price,” Boyd added.

Sean P. Deasy and Ryan Fitzpatrick, both of HFF, represented both the private seller and IEC as the buyer. Also, HFF’s Charles Halladay and Peter Smyslowski arranged acquisition financing. Goodwin Proctor provided legal counsel and Eisner Amper an audit opinion.