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Pac Life-Backed Apartment Towers to Sell for $300M

A high-rise apartment complex in Chicago partly owned by Newport Beach-based Pacific Life Insurance Co. is set to trade hands in what’s reportedly the priciest apartment sale the Windy City has seen in more than 18 months.

Morguard Corp., an Ontario, Canada-based investor, is under contract to buy Alta at K Station, an 848-unit, two-tower complex in Chicago’s West Loop, for $300 million or about $354,000 per unit, according to local reports. The deal is expected to close by year-end.

Alta is one of two recently built apartment complexes developed by Chicago-based Fifield Cos. that Pacific Life helped fund during the past five years. The two companies also worked together to build Chicago’s 350-unit Echelon at K Station, which, like Alta, opened a few years ago with resort-like amenities and monthly rents approaching $3,000.

Echelon sold about a year ago for nearly $105 million, or about $300,000 per apartment, according to Crain’s Chicago Business. Alta was initially expected to sell around the same time as Echelon, in late 2011, but the two-building complex was pulled off the market amid reported buyer worries about an abundance of new apartments coming online in Chicago.

Holding off on the sale of Alta appears to have been a good move for the sellers, who figured to get $50 million less, at $250 million, for the complex in late 2011.

Pacific Life announced in 2007 it was helping fund Fifield, a well-known developer of high-end condo and apartment complexes, for up to $400 million in apartment construction. Chicago has been the focus of that development to date.

Bascom Buyback

Irvine-based Bascom Group LLC has bought Cynthia Circle Apartments in Garden Grove.

It is the second time the multifamily apartment investor has owned the 99-unit complex, once eyed as a potential housing-redevelopment site.

Bascom paid $17.5 million—or $177,000 per apartment—for the complex, which is located at 11031 Cynthia Circle, just off Euclid Street and a few blocks from the Garden Grove (22) Freeway.

Cynthia Circle was built in 1964 and includes a mix of two- and three-bedroom apartment units. The complex runs about 106,000 square feet and is 97% occupied.

The property was purchased through Bascom Value Added Apartment Investors, an equity fund run by Bascom that has bought four other apartment complexes.

Bascom ranks as the country’s 47th-largest apartment owner, with about 25,500 units in its portfolio, according to trade publication Multifamily Executive.

The capital markets group of CBRE Group Inc. said it lined up a $13.7 million loan for Bascom to help finance the transaction. The loan carries an interest rate of 2.5% above the 30-day LIBOR rate for three years, according to CBRE’s Brian Eisendrath, part of the brokerage’s debt and equity finance group in Los Angeles.

It’s the second time Bascom has owned the complex. It sold the complex in 2002 to Irvine-based Granite Investment Group for a reported $11.2 million.

The property has seen at least one other sale during the past decade, trading for $20 million in 2007 to an Irvine-based housing developer, according to CoStar Group Inc. records.

The property was previously eyed for a potential 144-unit townhome project at the time of that sale. The project never moved ahead amid the housing downturn.

Bascom doesn’t appear likely to revisit the housing redevelopment plans. The company said it plans to renovate the complex, including building out the currently vacant clubhouse to add a business and fitness center, among other upgrades.

Van Nuys Buyer

Newport Beach-based Shubin Nadal Associates LLC is partnering with an affiliate of Hartford, Conn.-based Penwood Real Estate Investment Management LLC to buy a 17.4-acre industrial site in Van Nuys for redevelopment.

The property, at 7600 Tyrone Ave., is a former medical testing facility of Quest Diagnostic Clinical Laboratories Inc. It was vacated a year ago.

Quest is selling the property on undisclosed terms.

Shubin Nadal plans to demolish the existing buildings on the site and replace them with Central Park Van Nuys, a three-building industrial park of 290,000 square feet. The new buildings will be available for lease or for sale in early 2014.

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Mark Mueller
Mark Mueller
Mark is the Editor-in-Chief of the Orange County Business Journal, one of the premier regional business newspapers in the country. He’s the fifth person to hold the editor’s position in the paper’s long history. He oversees a staff of about 15 people. The OCBJ is considered a must-read for area business executives. The print edition of the paper is the primary source of local news for most of the Business Journal’s subscribers, which includes most of OC’s major corporate and community players. Mark’s been with the paper since 2005, and long served as the real estate reporter for the paper, breaking hundreds of commercial and residential real estate stories. He took on the editor’s position in 2018.
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