Irvine-based apartments investor Advanced Real Estate Services Inc. has made its largest local acquisition in several years, picking up a rental complex near Angel Stadium in the Platinum Triangle area of Anaheim.
The privately held firm, which also operates as ARES, said last week that it completed the purchase of Avalon Anaheim Stadium, a 251-unit rental complex at 2100 E. Katella Ave.
The six-story project sits across the street from the City National Grove of Anaheim and just outside the stadium’s parking lot.
Along with apartments, the complex
includes popular restaurant The Catch on the property’s ground floor.
Financial terms of the deal with Arlington, Va.-based AvalonBay Communities weren’t immediately disclosed.
ARES executives said it was “well in excess” of $100 million, or over $400,000 per unit; other reports pegged the sale at $112 million.
ARES’ last reported Orange County deal near that size was in the summer of 2016, when it paid a reported $99 million for a 421-unit complex in Fullerton previously called Camden Parkside. It renamed it Uptown Fullerton.
Stadium House
As with the Fullerton property, Avalon Anaheim is getting a makeover and a different name under the new ownership group. ARES christened it Stadium House and has earmarked an additional $5.3 million to upgrade the complex, which opened in 2009.
The company said it will upgrade the property’s leasing office, fitness center, swimming pool area, clubhouse, dog park, courtyards, elevators and lobbies. A new shared work space featuring offices and conference facilities will be created for residents who work from home.
Fort Worth, Texas-based D.R. Horton initially conceived the complex as a for-sale condominium project, but as has been the case with many Platinum Triangle-area complexes built following the recession, it was converted to a rental project under AvalonBay.
The seller said in its last annual report that it spent about $98 million to build and upgrade the 3.5-acre project.
The average apartment is about 1,200 square feet, and the property’s amenities include a rooftop entertainment deck overlooking the baseball stadium.
Monthly rents now top $2,000 for one-bedroom units and approach $2,500 for two bedrooms, according to data from CoStar Group Inc., which indicates it’s about 93% leased.
“We are excited about adding this asset to our portfolio in Anaheim,” ARES President Richard Julian in a statement.
ARES now has nearly 1,500 apartments in Anaheim, having recently been an aggressive buyer there. Last year, it paid a reported $54 million for the 193-unit Madera Apartment complex near the Riverside (91) and Orange (57) freeways interchange.
Its total portfolio now tops 8,250 units throughout Southern California whose market value ARES said exceeds $2 billion.
Apartment Town
The Platinum Triangle continues to be a hotbed of apartment construction, with several nearby projects underway, including large complexes built by the multifamily division of Lennar Corp. in the first phase of its long-awaited A-Town development, and the 400-unit Jefferson Platinum Triangle project.
“Our goal is to complete cosmetic upgrades so we can continue to compete with the new product currently being delivered,” Julian said.
“We feel we have an advantage, as this asset is the most well-located in the submarket, and the units are much larger than the competition.”
AvalonBay was represented in the sale by Sean Deasy and Ryan Fitzpatrick with the Newport Beach office of brokerage HFF LP.
Mike Elmore of NorthMarq Capital arranged a $67.5 million Fannie Mae loan on behalf of ARES, which said it raised more than $50 million in private equity for the acquisition.
