Igor Olenicoff, Orange County’s second-wealthiest businessperson, doesn’t plan many local real estate acquisitions in the current frothy market.
“Finding land or acquisition candidates in Orange County is a difficult task,” he recently told the Business Journal.
That’s why he continues to deploy more of his considerable fortune to real estate properties outside of the area.
His Newport Beach-based Olen Properties Corp., one of the largest privately-held real estate owners based in OC, closed on two large apartment complex buys last month in the Southeast U.S., deals totaling nearly $169 million.
In the largest, he paid just over $111 million for The Point at Perimeter, a 604-unit complex about 15 miles north of downtown Atlanta.
Built in two phases between 1989 and 1991, it sold for $184,400 per unit. The seller wasn’t disclosed.
It’s Olen’s eighth institutional-quality rental project in the Atlanta area. He first invested in the region about four years ago. It now has several thousand rental units in and around the sprawling city, including another complex about two miles away. Olen investments in the area since 2014 are estimated at about $500 million.
The seven existing complexes “are all performing beyond our initial expectation, primarily due to the outstanding population and job growth being experienced in Atlanta,” Olenicoff said.
He’s worth about $4.3 billion, trailing only the $17.2 billion fortune of Irvine Co.’s Donald Bren among OC’s wealthiest residents, according to Business Journal estimates.
Since the Great Recession, Atlanta’s suburban renter base has grown faster than any other U.S. suburbia or city center, rising nearly 25%, according to data from apartment market tracker RentCafé.
The area’s growth has drawn other large OC-based apartment investors in recent years, including Bascom Group and Steadfast Cos., both based in Irvine.
Monthly rents at The Point average about $1,255 per unit, and the complex brings in nearly $10 million in rents annually, according to marketing materials from brokerage JLL.
The complex is on about 20 acres near Perimeter Center, which JLL materials refer to as Atlanta’s largest employment base.
A nearby high-rise office district includes Mercedes Benz’s new North American headquarters and State Farm’s regional headquarters.
Nashville Entrée
While The Point at Perimeter acquisition adds to an established market for Olen, another recently closed deal in Nashville, Tenn., represents a new investment locale for it.
Olen paid $57.5 million for The Estates at Brentwood, a 254-unit complex about five miles from downtown Nashville.
Brentwood is considered Nashville’s most affluent suburb, with a median household income of over $140,000, according to marketing materials for the complex, which JLL also marketed for sale.
The complex traded hands for about $213,000 per unit, which, like the Atlanta deal, was an all-cash affair, according to Olenicoff.
The city’s apartments market has experienced nearly seven years of continuous rental growth; monthly rents in and around Nashville average about $1,490, according to Zillow data. The Estates at Brentwood’s rents average about $1,525.
Olenicoff said his firm bought the Estates “to capitalize on the substantial high tech/medical corporate growth the city is experiencing.”
He said, “We foresee additional growth in the Nashville area in the coming year.”
Olen’s other holdings in the Southeast are in South Florida, where it owns a dozen rental properties and has another project under construction, according to its website. It also has considerable rental holdings in Las Vegas and Phoenix.
Its sole OC apartment complex is at the Olen Pointe mixed-use campus next to the Orange (57) Freeway in Brea, where the investor also owns offices.
All told, Olen now has 15,240 apartments across the country, not counting projects under development, according to Olenicoff.
“Our portfolios in Las Vegas, Phoenix, Atlanta and South Florida are also achieving similar levels of occupancy [as Atlanta and Nashville] and we continue to add to those portfolios each year.”
Local Challenges
Last year, Olen made its largest area deal in nearly a decade, paying $75 million for the 4100 Newport Place tower in Newport Beach.
The bulk of Olen’s approximately 8-million-square-foot commercial portfolio, excluding apartments, is in OC. The company has also bought several smaller business parks in the county over the past five or so years.
“The good news is that our entire portfolio in Orange County is at 95% or better leased,” Olenicoff said, “so we are quite pleased with our portfolio’s performance here, and also realize that we have had to look elsewhere for growth in the past couple of years.”
