Club Laguna, a 421-unit apartment complex in Laguna Beach, has traded hands in what looks to be the priciest sale of an Orange County apartment complex this year.
The property, located near Laguna Canyon Road and the 73 Toll Road, was bought by an affiliate of Dallas-based Invesco Real Estate, operating under the ICRE Laguna Club LLC name.
The 390,000-square-foot complex is said to have traded hands for $121 million in an all-cash deal, according to brokerage data.
That price works out to about $287,000 per apartment, and $309 per square foot.
It’s the only apartment complex in OC known to have traded hands at a price above $100 million so far this year, not including multiproperty portfolio transactions.
It’s also one of only a handful of commercial real estate deals of any type in OC to break the $100 million mark in 2012.
The price reflects the still-hot investment market for rental properties in OC, as well as the property’s enviable location in Laguna Beach, according to marketing materials from investment advisory firm Holliday Fenoglio Fowler LP, whose brokers worked on the deal.
Club Laguna is described as the “only institutional-sized asset” in Laguna Beach, according to HFF’s marketing materials.
Calls to the company’s brokers for comment on the sale were not returned.
The nearly 27-acre property sits at the northern tip of Laguna Beach, near the city’s border with both Laguna Woods and Aliso Viejo. It’s about four-and-a-half miles from the beach.
Monthly rents at Club Laguna, which is about 96% leased, average about $1,715.
A potential renovation of the 25-year-old complex by its new owners could help boost rents while helping it compete with a bevy of new apartments coming on line in Irvine, according to marketing materials.
The purchase is the first in Orange County this year for Invesco, an institutional investor that counts numerous pension funds as clients, and often does deals in partnership with equity partners.
About a third of Invesco’s real estate investments this year have been in California, including retail, office and industrial purchases, along with apartments, according to the company’s website.
Seller
Aliso Viejo-based Shea Properties sold Club Laguna, one of eight area complexes that the commercial developer had owned.
Shea Properties’ OC apartment portfolio now totals about 4,000 units, with about 6,300 companywide.
A second area complex owned by Shea Properties, a 230-unit complex in Mission Viejo called Madrid Apartments, is said to be in escrow and could close later this month, according to sources. Terms of that sale, and the potential buyer’s name, have not been disclosed.
Officials for Shea Properties, which has been making a push toward developing new apartment complexes in Northern California of late, declined to comment on the Club Laguna sale.
The $121 million price tag reported for Club Laguna dwarfs the previous high mark of an area apartment complex sale for this year—the $67.5 million sale of Huntington Beach’s Via Verde complex, which closed this summer.
Notable Deal
Other notable multifamily deals that took place earlier this year include Essex Property Trust Inc., a Palo Alto-based apartment owner and developer, buying out a partner’s roughly 50% stake in the two-tower Skyline at MacArthur Place complex for $85 million.
At least one deal currently on the market could top the price paid for Club Laguna.
Madison Park, a 768-unit apartment complex in Anaheim, located about 3 miles from Disneyland, was put up for sale last month by Palo Alto-based Pacific Urban Residential.
The 12-building property is expected to sell for about $140 million. A time frame for the deal getting done hasn’t been disclosed.
