A multifamily project in Brea has sold for $108.1 million, in what’s the largest reported apartment deal in the city in over a decade.
Property records indicate an affiliate of Chicago-based Nuveen Real Estate paid about $530,000 per unit for Joule La Floresta, a 204-unit complex built a few years ago along Imperial Boulevard.
The five-story rental project is part of the recently built La Floresta mixed-use development that also includes homes and a shopping center. The apartment portion of the development runs about 171,700 square feet.
The property is on a 2.9-acre lot at 420 La Crescenta Drive, about 3 miles west of the Brea Mall.
JLL’s Sean Deasy and Ryan Fitzpatrick represented the seller, Houston-based Morgan Group and Chicago-based Mesirow Financial.
The new owner is an affiliate of global investment manager Nuveen, a wholly-owned subsidiary of Teachers Insurance and Annuity Association of America, a provider of financial services in the academic, medical, and governmental fields among others.
Nuveen Real Estate is one of the largest real estate investment managers in the world with $133 billion of assets under management.
Property records indicate that Nuveen bought the complex for its U.S. Cities Multifamily Fund, which it describes as a “sector-specific, U.S. city-based opportunity [fund] that seeks to deliver durable cash flow distributed by fully accessing the broad-based demand of middle-income renters.”
Targets for the fund include apartments in U.S. cities “that we believe are best positioned for demographic and structural growth.”
The Brea complex is the first reported in Orange County for the fund.
Per-Unit High
At about $530,000 a unit, the deal is the largest on a per-unit basis in over a year for an Orange County apartment complex larger than 100 units. Only a handful of properties of that size or larger have topped $500,000 a unit in recent years.
By total price, the deal comes in at No. 5 for OC multifamily transactions in the past year, according to CoStar data.
The top four deals were also focused on workforce housing, or “middle income” housing, and were all part of workforce housing finance program put in place by two state programs, the California Statewide Communities Development Authority (CSCDA) and the California Municipal Finance Authority.
Each of those four deals were for complexes in Anaheim, with the largest, the $160 million sale of The Jefferson, a 400-unit recently built apartment project in the Platinum Triangle, going for $400,000 a unit.
The CSCDA is designed to assist in the creation of affordable and workforce housing projects by partnering with local governments to finance projects through tax-exempt bonds.
Nuveen Affiliate
Joule La Floresta was nearly full at the time of sale, CoStar records indicate.
The building has a mix of one-, two- and three-bedroom units ranging in size from 802 square feet to 1,535 square feet. Asking rents for a two-bedroom start at $3,070.
Project amenities include a pool area with cabanas, open-air lounges, fitness center, yoga studio and on-site pet spa.
Hot Apartment Market
Orange County’s multifamily market outperformed other regions throughout the pandemic, with rents among the highest on the West Coast, according to CoStar data.
Asking rents for a two-bedroom apartment currently average about $2,475, up 12% from the year prior, and 60% more than national asking rents.
This is driving investor interest and higher sales prices, with an average price per unit of $438,000 for local sales, compared to $219,000 nationally.
CoStar notes that there are north of 6,000 units under construction in OC, down from the 7,000 units under construction in the two years prior to the pandemic.
