Irvine-based Western National Group hopes to hold onto its recently acquired Seacrest Apartment Homes longer than the last area company that had the big San Clemente complex.
An affiliate of Western National, one of Southern California’s larger apartment owners, announced in late October it was buying Seacrest. It’s one of the larger apartment properties in San Clemente, with 368 units.
The sales price for the complex was $95.4 million, or about $259,000 per unit. The deal appears to be the largest apartment sale in Orange County this year.
Western National is the fourth owner of the complex since 2006.
Real Estate Partners Inc., an investment and management company in Irvine, reportedly paid $87.5 million, or nearly $238,000 per unit, for Seacrest in 2006.
The property wasn’t in Real Estate Partners’ portfolio for long—the company filed for bankruptcy in late 2007 after charges of securities fraud were leveled against the company and its executives.
The San Clemente property itself never was involved in the bankruptcy, according to Ray Eldridge, a broker with the Newport Beach office of CBRE Group Inc., which represented the seller in the latest deal.
An affiliate of Trecap Partners—a Philadel-phia-based investor with ties to an equity partner of Real Estate Partners in the $87.5 million sale—is said to have taken over ownership of the complex following the bankruptcy.
Trecap was the seller in the recent deal with a private equity fund managed by Western National.
It is unclear how much money Trecap made on the sale. Seacrest was assessed at a value of $62.2 million last year, down from $91.1 million in 2009, according to CoStar Group Inc.
Western National is rebranding the 25-acre complex, located about a 10-minute drive from the ocean, as Seacrest Luxury Apartments. The complex was built in 1998 and renovated about two years ago, according to the buyers.
Monthly rents for the 224 one-bedroom apartments run about $1,400, while 144 two-bedroom units start at about $1,800 per month.
The complex is reported to be about 97% leased, but sees its share of renter turnover. Marines stationed at nearby Camp Pendleton and their families make up a large percentage of Seacrest’s residents.
The deal is the second recent big-dollar acquisition made locally of late by affiliates of Western National, which is OC’s second-largest owner of apartments behind Newport Beach-based Irvine Company.
In July, the company paid $31 million for Anaheim’s La Ramada Apartments, a 193-unit complex.
Western National now owns close to 11,000 apartments here.
The company also has been making purchases outside the county in recent months, reversing a more cautious approach it had taken on acquisitions over the past couple years.
“People are buying Southern California apartments like they’ll never be built again,” Chief Executive Michael Hayde said in January, when he questioned the trend of rising valuations on apartments.
Western National raised a $250 million fund a few years ago with the hopes of buying properties at capitalization rates—the expected initial return from rents—close to 9%.
Hayde said early this year that the company was hesitant to make deals with capitalization rates running between 4% and 5.5% for most area sales. Seacrest likely traded at the low end of that range.
Koll Center Offering
In the main story for the Oct. 9 real estate column, I wrote about the number of notable small- and midsize offices along a stretch of Von Karman Avenue in the Koll Center Newport business park that were either in the process of being sold or recently sold.
You can add another recently built office, at 4200 Von Karman, to that list.
The distinctive-looking, two-story office totals a little under 3,400 square feet, and is being offered for sale at about $4 million, or about $1,175 per square foot.
The office was built in 2007 by Master Development Corp. in Newport Beach, whose executives now help run the U.S. management office of Australia-based Dexus Property Group.
Dexus has been an active buyer of area industrial properties of late. Its local operations are run out of the Von Karman Avenue office, which is directly across the street from the Pacific Club.
BIA’s Local Ties
Corona del Mar resident Mark Knorringa has been named chief executive of the Building Industry Association of Southern California Inc., which represents more than 1,000 companies involved in the region’s homebuilding industry.
Knorringa, 61, has worked in the industry for more than 35 years as a builder, developer and association executive. Most recently, he headed up the BIA’s Riverside County chapter.
The BIA has five chapters in Southern California; its Orange County chapter is headed up by Bryan Starr, who took the chapter’s top spot earlier this year.
