Raintree Bulks Up Its SoCal Apartment Portfolio

By Dees Stribling, Contributing Editor

Los Angeles—Raintree Partners has acquired five multifamily properties in Los Angeles County totaling 327 units. The Laguna Niguel, Calif.-based investor is a specialist in southern California apartments; this deal brings its holdings in the region to 21 properties, eight of which were acquired in the last 10 months.

The acquisition includes Pico Lanai Apartments, a 174-unit property in Santa Monica, and the Westwood Apartments. The Westwood is a portfolio of four properties totaling 153 units in the Westwood Village area of Los Angeles, adjacent to UCLA.

Raintree Partners acquired three other apartment communities in Los Angeles in 2014. They include Coldwater Canyon, a 39-unit property in Studio City, Calif. acquired in September; 5119 Maplewood, a 60-unit property in Hancock Park, Calif. acquired in April; and 5015 Clinton, a 50-unit property also in Hancock Park, Calif., and also acquired in April.

Raintree’s director of acquisitions, Aaron Hancock, explained the company’s strategy, which targets smaller properties in locations within Los Angeles that can be clustered over time. “As we gain critical mass in these targeted submarkets, we will achieve management efficiencies that lead to higher returns than investing in larger properties in the same submarkets, which tend to trade at more aggressive cap rates,” he said.

These are also value-add deals. Raintree Partners said it would invest $4.1 million ($23,500 per unit) to completely renovate and modernize the exterior and common areas of the 1960s-vintage properties.