An apartment complex that overlooks Newport Harbor has traded hands at one of the higher per-unit prices recently seen among rental properties in Orange County.
The 64-unit Waterfront in Newport Beach, which is located on Bayside Drive, sold in late April for about $25.5 million.
About 70% of the units have water views. Notable amenities at the complex include 34 boat slips, a private beach, saltwater pool, bocce ball court and a fitness center.
Newport Beach-based real estate investor Waypoint Property Group bought the complex in a venture with Rialto Capital Management of Miami.
BT Real Estate Group, a Los Angeles-based investor, sold the complex, which is across the street from the Bayside Shopping Center and a short walk from Balboa Island.. The investment group acquired the property in 2011 for a little less than $14.9 million.
Rarity
The latest sale represents a nearly 70% increase in the property’s value since 2011, as well as a nearly $400,000-per-unit sale price.
Larger apartment properties in Orange County sold for an average of about $180,000 per unit in 2014, according to brokerage data. There have been few apartment deals in OC approaching the $400,000-per-unit mark in recent years. Only a handful of luxury-laden complexes originally built as for-sale units and later converted to rentals have approached that mark.
The Waterfront’s location—it’s one of the three large-sized, bayfront apartment properties in Newport Beach—and recent renovations were key factors in the high price, according to Stewart Weston, a senior director with Institutional Property Advisors, a multifamily brokerage division of Marcus & Millichap.
“It’s a marquee building in one of the most incredible locations” in the area, said Weston, who brokered the latest deal, as well as the 2011 sale of the Waterfront, which previously operated under the name Newport Marina Apartments.
The Waterfront’s 4-acre property is subject to a ground lease that runs for another 28 years.
The land where the rental property is located was once entitled for 17 single-family homes, but the new owners aren’t pursuing that plan, according to Waypoint Chief Executive David Team.
Pricey Rents
About half the units have been upgraded in the past five years, among other property renovations, according to marketing materials for the Waterfront. The renovated units’ monthly rents have increased by an average of nearly $1,600.
The new owner will continue the renovations to the remainder of the units at the complex, whose units average about 1,300 square feet per apartment, Team said.
Monthly rents for larger renovated units at the 17-building complex can top $5,000.
That’s more than the going rate for the bulk of the rentals at many of the other high-end apartment complexes in Newport Beach, including Irvine Company’s Promontory Point and The Colony at Fashion Island, according to marketing materials for the Waterfront property.
Balboa Bay Club
The most expensive large apartment complex in Newport Beach in terms of rents is believed to be the 144-unit rental component of the Balboa Bay Club.
Some three-bedroom units at the club, which was acquired by local investor Dick Pickup’s Irvine-based Eagle Four Partners in 2012, have monthly rents that top $15,000. The average rent at the club exceeds $6,000 per month, according to marketing materials for the Waterfront.
