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Tuesday, Jul 16, 2024

Lyon Living Sells New Placentia Apartments for $130M

Newport Beach-based multifamily developer and operator Lyon Living has sold one of its newer Orange County apartment projects, in the third priciest local rental property sales reported in 2022 to date.

The Herald, a 215-unit apartment project in Placentia, sold for north of $130 million, records indicate.

The per-unit sale price of $605,000 tops this year among multifamily projects in Orange County running at least 100 units.

Lyon Living, an apartment development firm affiliated with the late Gen. William Lyon and his family, and led by longtime multifamily executive Frank Suryan, built the project at 150 E. Crowther Ave. in a venture with Integral Communities.

The two Newport Beach-based developers closed on the site of the city’s former Boys & Girls Club facility in 2018 for $4.7 million and delivered the five-story project last year.

The buyer is MG Properties, a private San Diego-based real estate investor whose OC holdings, now topping 600 units, are all in North Orange County.

Old Town Revamp

The Herald counts one-, two- and three-bedroom units with an average size of 903 square feet.

Rents range from $2,644 for a one-bedroom unit to $4,610 for a three-bedroom unit. The average rent is $2,982, about $400 more than OC’s current average, which has surged since the onset of the pandemic amid rising demand and shrinking inventory.

The project delivered in August 2021 and is about 70% occupied, according to CoStar Group data.

Lyon Living and Integral kicked off work on the project amid a larger revitalization push for Placentia’s Packing House District. Approvals came a few months after the city council revamped zoning rules to spur new mixed-use development near the long-planned Metrolink Station, located adjacent to The Herald.  

The Metrolink is expected to be the newest train station in the county, but its opening has been delayed.

The Herald complex is also a block away from Jefferson Centerpointe, a 418-unit, mixed-use apartment rental project that kicked off construction in 2019, and will become one of the largest residential developments in Placentia in several years.

Centerpointe’s developer, Irving, Texas-based JPI, closed construction financing on the project at the start of last year; construction is expected to wrap by next spring, with leases starting later this year.

The project will “aid in Placentia’s planned revitalization, which includes a reimagining of the city’s Old Town area, located just 0.2 miles from the development, into a small-scale, walkable urban center that highlights Placentia’s historical and cultural diversity,” JPI said in a statement last year.

San Diego Buyer 

MG Properties’ acquisition of The Herald marks the company’s third property in Orange County.

“The Herald is an ideal addition to our Southern California portfolio,” MG Properties Managing Director Jeff Gleiberman said. “We believe Orange County has strong fundamentals and is positioned well for growth in the near term.”

The company owns another apartment complex in Placentia—the 125-unit Union Place Apartments—and a 768-unit complex in Anaheim, Madison Park, near the Disneyland Resort area.

The sale continues a string of top-dollar apartment sales in North Orange County; the two priciest deals year-to-date occurred in Yorba Linda and Orange.

In the top deal, Interstate Equities spent $205.5 million for The Bryant at Yorba Linda, a 400-unit low-rise complex. In Orange, BLDG Partners paid $142 million for Allure Apartments, a 282-unit project that delivered in 2006.

Both complexes are more than a decade old—the first delivered in 1986—signaling investors aren’t just looking for brand new, Class A projects when scouting acquisition opportunities.

Hospitality Venture  

Lyon Living was represented by Eastil Secured’s Mark Peterson, Joseph Smolen, Geoff Boler and Jonathan Merhut in the sale. The property’s purchase was financed by affiliates of Apollo Global Real Estate Management LP.

In addition to operating an apartment portfolio topping 14,000 units, Lyon Living, launched in 1989 by Suryan, has been delving into the hospitality business.

It partnered with Newport Beach-based Eagle Four Partners in 2020 to acquire the 532-room Newport Beach Marriott Hotel & Spa near Fashion Island for $216 million. Construction is currently underway to revamp the hotel into Vea Newport Beach, expected to debut next month. 

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