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Tuesday, May 24, 2022

$163M Laguna Niguel Sale as Rentals Stays Hot

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A recently built apartment complex in Laguna Niguel has traded hands for $163 million, the priciest reported multifamily transaction for Orange County in a year already heavy with big-dollar apartment deals.

Virtú Investments, a Larkspur-based multifamily real estate investment firm focused on properties in the Western U.S., recently closed on the purchase of Vilara, a 299-unit complex just west of the San Diego (5) Freeway, near Crown Valley Road.

The investor paid about $545,000 per unit for the 2-year-old complex, according to property records.

The five-story complex along Getty Drive was built and sold by Scottsdale, Ariz.-based Alliance Residential Co., following the 4-parcel site’s entitlement for residential development by Newport Beach-based investor and entitlement firm Blackwood Real Estate.

Alliance and Blackwood are among those that have led the charge to transform a largely commercial 315-acre spot just west of the 5 freeway in Laguna Niguel into one of the most active residential development areas in South OC in recent years.

The city approved nearly 3,000 residential units for the area about a decade ago. Other new rental complexes in the area include the nearby Broadstone Cavora complex, a nearly 350-unit project also built by Alliance, which has a local office in Irvine and numerous other multifamily development projects elsewhere in OC.

The immediate area continues to see a heavy amount of construction for other multifamily and for-sale housing projects.

New to OC

Vilara marks the first OC investment for Virtú Investments, according to the company’s website. The buyer took out a pair of loans with First Republic Bank totaling $75 million to finance the purchase, records indicate.

The buyer currently owns eight complexes in California and 19 complexes in total, its website indicates.

The Laguna Niguel property is one of three it is reported to have bought this year; the others are in Washington and Colorado.

Since its founding in 1997, Virtú said it has acquired and operated more than 130 properties, totaling over 24,000 units.

Blockbuster Year

The $163 million price for Vilara is the most reported paid for an apartment complex in Orange County this year, and already marks the ninth multifamily deal in OC to top the $100 million mark in 2021, according to data from real estate market tracker CoStar Group Inc.

In all of 2020, there were two local apartment complexes to trade for over $100 million. There were three to hit that mark in 2019, according to CoStar’s data.

Per-unit prices for the nine mega-deals of 2021 have ranged from $400,000 for Anaheim’s Jefferson Platinum Triangle complex to nearly $569,000 for Orange’s Cameo, according to brokerage data.

Five of the nine largest deals of 2021 to date are for complexes built in the past four years. Vilara is the only South County property among those nine sales; five of the nine are in Anaheim.

Vilara is one of two of the larger deals to close in the past month or so; the other is Anaheim’s 1818 Platinum Triangle, a 265-unit apartment community at 1818 S. State College Blvd.

Newport Beach’s Waterford Property Co. paid $127 million, or about $480,000 per unit, for the complex.

Waterford, in partnership with California Statewide Community Development Authority, has been involved in four of the top nine rental deals in OC this year, with a focus on converting the properties into essential housing, and lowering rents for qualified middle-income tenants such as first responders, school district employees and others.

Vilara in Laguna Niguel isn’t part of that middle-income housing program. Units start around $2,200 a month for one-bedroom units; larger three-bedroom units are currently being offered at $4,500 a month. 

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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