Olen Properties Corp. has spent nearly $200 million to buy three out-of-state apartment complexes this month, adding to a busy year of acquisitions for the Newport Beach-based real estate owner and developer.
The privately held company recently completed the purchases of apartment properties in Arizona, Florida and Georgia, adding a little more than 1,000 rental units to a portfolio that’s estimated at more than 12,000 units.
The largest of the purchases is in Scottsdale, Ariz., where Olen paid $88 million to buy a 388-unit complex called the Jefferson at One Scottsdale.
The $88 million deal is the largest purchase that Olen’s been reported to have made in a decade, when it paid about $362 million to buy One South Dearborn, a skyscraper in Chicago.
The Scottsdale property, which is being rebranded One North Scottsdale by Olen, traded hands for about $227,000 a unit and was sold by JPI, an Irving, Texas-based developer that has a pair of apartment projects in the works in the Platinum Triangle in Anaheim.
The Arizona complex opened last year and is “the top of the line” for rental properties in the Scottsdale area, said Igor Olenicoff, Olen’s president.
It’s Olen’s third apartment complex buy in Arizona this year following a pair of deals in nearby Gilbert that totaled about $69 million.
The region’s job growth, particularly for technology-focused positions, drew Olen to the area, Olenicoff said at the time of the Gilbert-area purchases.
The area “reminds me of Orange County and the airport area back when I first came here,” said Olenicoff, who started Olen in 1973.
Another market drawing Olen’s interest: Atlanta, where the company just picked up its third and largest complex in that metro area. It paid about $69 million for the Highlands at Sugarloaf, a 390-unit property about 15 miles northeast of downtown Atlanta in Duluth, Ga.
The complex opened about a year ago and sold for about $177,000 per unit and was sold by Brand Properties of Atlanta.
Olen made its first Atlanta-area purchase about a year ago and now owns 1,087 units in the region. The Sugarloaf property is located along an area that has seen some of the biggest corporate growth in the market of late. Companies with large operations nearby include Cisco Systems and Mitsubishi Electric.
The third big purchase for Olen this month took place in West Palm Beach, Fla., where the company picked up Ibis Reserve, a 234-unit complex next to one of the oceanfront city’s largest country club communities.
Chicago-based AMLI Residential sold the 15-year-old property to Olen for about $44 million, or $188,000 per unit. It’s the 12th Florida rental project that the company owns, according to Olen’s website. It also has two projects under development in the state.
The three purchases bring Olen’s acquisition totals to about $386 million over the past year, according to Olenicoff.
A bulk of the recent deal-making has been headed up by Olenicoff’s daughter, Natalia Ostensen, who is vice president of the company.
She has been taking on a larger role at the company in recent years.
All but one of Olen’s purchases over the past year have involved apartments. The deals have added more than 2,300 units to the company’s rental property holdings, which are among its best-performing assets right now, Olenicoff said.
Olen has “experienced significant rental income growth in our multifamily portfolio,” he said.
Office Buy
The company also made one office acquisition this year, accounting for its only buy in Orange County over the period.
It paid a little more than $17 million in September for Pacific Park, a six-building complex in Aliso Viejo that totals about 100,000 square feet.
The company owns more than 7.5 million square feet of commercial real estate, much of it in Orange County, in addition to its multifamily holdings.
Those commercial buildings also are “seeing income improvement” this year, he said.
A bulk of Olen’s deals this year, including the three recent apartment purchases, were all-cash deals, said Olenicoff, who is Orange County’s second-wealthiest resident, with a fortune estimated at $3.5 billion.
Debt
The company has taken on a bit more debt of late.
It recently secured $275 million in debt, which was placed on three local properties, as well as the company’s Arizona apartments, he said.
“The rates being favorable for now, we thought it may be a good time to replenish some of the cash expended in the past 12 months.”
He said the new funding should “provide us with capital to continue our growth into next year, as we feel the pricing, although not inexpensive by any measure currently, will only continue to escalate in the coming years.”
