Marina Del Rey, Calif.—Real estate giant Archstone has bought Bay Club Apartments and Marina for $43.9 million from Decron Properties Corp. Located in Marina Del Rey, Calif., the Bay Club includes 205 residential units, 207 boat slips and 11 end ties, and it sits on a leasehold from Los Angeles County.
Decron had owned the property since 2005, when it bought it at what the company calls “a discounted cap rate” because the asset had less than 15 years left on the leasehold. The company then worked with the California Coastal Commission and the County of Los Angeles to obtain a 30-year extension. As part of the arrangement, Decron was willing to increase rents and invest in excess of $20 million to renovate the project.
According to Decron CEO David J. Nagel, the company typically holds assets for the long term and rarely sells. But rising rents on the Westside, among other factors, helped generate numerous offers for the property. “The market drove values to a level where it simply wasn’t worth taking on the construction risk in completing the renovations,” he explains.
Decron Properties Corp. currently owns and manages over 5,000 residential units with another 460 units slated for development over the next three years. It’s the real estate investment and development arm of the Nagel Family Trust, and it has assets in excess of $1.5 billion, including—besides apartments and marinas—retail centers and office buildings.
Greg Harris, executive director of Institutional Properties Advisors, along with IPA directors Kevin Green and Joseph Grabiec, represented both the buyer and seller of the rarely marketed property. IPA is a newly created brokerage division of investment specialist Marcus & Millichap.