An upscale 250-unit Costa Mesa apartment project a few blocks from South Coast Plaza has sold in a $172.2 million deal to a large institutional investor that counts other notable properties in the area.
Property records indicate that an affiliate of institutional investor Rockwood Capital, with local offices in Los Angeles, paid nearly $689,000 per unit for 580 Anton, the first upscale apartment project in the Costa Mesa arts district area in nearly a decade when it delivered in 2018.
Foster City-based Legacy Partners is the seller and developer of the project, located across the street from the Plaza Tower office building and the under-construction Orange County Museum of Art.
By total price, the deal is the second priciest apartment sale to occur in 2022 for OC.
By per-unit price, it’s the largest apartment sale in OC for a complex larger than 100 units in at least five years, according to data from real estate market tracker CoStar Group Inc.
Rents Topping $4K
Legacy Partners acquired the 2-acre site, formerly a neighborhood retail center, in 2015. Construction kicked off the following year.
The five-story, 200,000-square-foot apartment building on the northeast corner of Anton Boulevard and Avenue of the Arts is about 94% occupied. Units average 868 square feet, with studios running 506 square feet and two-bedrooms spanning 1,144 square feet.
Monthly rents range from $3,000 to $4,300.
Prior Sale Nixed
A sale had been in the works for the Costa Mesa property since last year.
Last summer, city officials considered partnering with the California Statewide Communities Development Authority to acquire 580 Anton via tax-exempt bonds as part of a program to increase California’s share of housing for middle-income renters.
Rents at 580 Anton would be lowered for those making 80% to 120% of the area median income.
That deal, expected to be in the $170 million range, never came to be after city officials opted not to move ahead.
CSCDA, together with partnerships with local companies such as Newport Beach’s Waterford Property Co., has been behind a flurry of top-dollar apartment deals since 2020, including four Anaheim multifamily sales totaling $545 million.
Waterford wasn’t part of the proposed deal for 580 Anton; Danville-based Opportunity Housing Group was that deal’s sponsor.
OC Ties
Rockwood invests in a variety of property types, and says its investor base includes sovereign wealth funds, public and private pension funds, endowments, foundations, insurance companies, funds of funds, high net worth individuals and family offices. It reports having over $12 billion of assets under management.
In May, it was announced that commercial brokerage Colliers would be taking a 65% stake in Rockwood; terms of the deal weren’t disclosed.
Rockwood is no stranger to OC or the area’s base of developers. The new owner of 580 Anton has partnered with Newport Beach developer Burnham Ward Properties for a number of transactions in recent years.
Rockwood and Burnham Ward most recently sold the Long Beach Exchange, a multi-property retail center that opened in 2018 near the Long Beach Airport, in a $160 million deal.
The 266,000-square-foot project, also known as the LBX, sold at the end of 2021 for about $600 per square foot, among the priciest on record for retail transactions in Los Angeles and Orange County.
PGIM Real Estate was the buyer of the LBX. That investor, an asset management affiliate of insurance and investment giant Prudential Financial Inc., was also behind OC’s two priciest apartment deals in 2021, paying $194 million for the Jefferson Rise and another $186 million for the adjacent Jefferson Edge complexes in Anaheim’s Platinum Triangle.
PGIM and Rockwood have been on the opposite end of OC deals before; the former sold a Newport Beach office building last year to Rockwood and Ocean West Capital Partners for $64 million.
Legacy Sunflower
As Legacy Partners wrapped construction of 580 Anton in 2018, the builder began work on a second residential project a few blocks away, just over the city line in Santa Ana.
Legacy and German asset manager DWS Group paid $16.7 million for a 3.6-acre site at 651 Sunflower in September 2020 after gaining entitlements for a 226-unit apartment building totaling 263,754 square feet.
The site previously held a nearly 10,000-square-foot building used by The Sound church, along with a paved parking lot.
The five-story Legacy Sunflower project is expected to deliver next February.
