North Hollywood Apartments Sell for $74M
- Mar 08, 2012
Los Angeles—UBS Inc. has purchased NoHo-14, a 180-unit apartment complex in the North Hollywood Arts District of Los Angeles’ San Fernando Valley. The company paid $74 million for the asset, representing a 4.1 percent cap rate, according to the sellers, Kennedy Wilson and its partners.
According to Bob Hart, president of KW Multifamily Management Group, there was strong interest in the property among potential buyers. The sellers had a strong motive to sell, too. “The sale of NoHo 14 was timed to take advantage of the reduction in cap rates for infill Class A multifamily properties in gateway cities,” Hart tells MHN.
“Condominium-quality assets built near major employment drivers such as the Burbank media district and movie studios are rarely on the market,” Hart continues. “NoHo 14 is an iconic building that was constructed with financial support from the CRA [Community Redevelopment Agency], which makes it even more costly to replace today.”
Kennedy Wilson acquired the building, along with partners Guardian Life Insurance Co. and RECP/Urban Partners, for $59 million in 2010 as an REO asset. The company then converted its condominiums into apartments, implemented a new leasing program, and changed its property management to concierge-level service. Kennedy Wilson says it was thus able to grow the annual net operating income of the property from $2.3 million to $3.1 million.
During their ownership, Kennedy Wilson and its partners also renovated the building’s amenities, such as the recreation room, fitness center and high-tech business center. Also, in a $3.8 million deal during the period, Roger Dunn Golf leased 11,000 square feet of ground floor retail space at NoHo-14, and relocated its golf superstore from its location of over 30 years.