Advanced Real Estate Services is continuing its apartment investment tear, this time looking local for its most recent buy.
The real estate firm, among the largest multifamily owners in Southern California, recently closed on Solare Apartment Homes, a 240-unit apartment complex in Santa Ana, for $64 million.
It’s the priciest reported apartment sale in Orange County this year, according to records from real estate market tracker CoStar Group Inc.
The deal also marks the fourth acquisition in 2020 for the Irvine-based investor. It pushes the company’s recent deal-making past $275 million.
The new property “fits perfectly into our Orange County portfolio bringing us to over 1,600 units owned and managed in Santa Ana and over 9,500 units overall in our Southern California target region,” Advanced President Richard Julian said in a statement.
Renovations Planned
Tyler Leeson of Marcus & Millichap and Stewart Weston of CBRE brokered the deal. Records indicate the seller to be a private investor based in Los Angeles.
Advanced paid nearly $267,000 per unit for the complex, located at 2111 W 17th St.
The 8.4-acre site’s about a block from Santa Ana College, next to the Santa Ana River and the Riverview Golf Course.
The new owner said it plans to invest $10 million in renovations and has rebranded the complex as River House.
It assumed a $37 million loan as part of the transaction; which CoStar records indicate traded at a 4.6% capitalization rate. The complex was nearly full at the time of sale.
Renovation plans include infrastructure and aesthetic upgrades like new windows, roofing, paint, landscaping and updated interiors.
“This property has tremendous upside potential with its central location, ample amenities and spacious units,” Julian said.
“We have worked closely with the City of Santa Ana over the past 30 years. We have purchased and upgraded apartment buildings all over the City including the South Coast Metro and Artists Village area,” he said.
Mobile Home Sale
The buyer financed the deal through proceeds made from a recent portfolio sale.
The Business Journal reported last month that Advanced, in partnership with Mills Land & Water, sold a collection of mobile home sites located on nearly 50 acres of land along the Pacific Coast Highway in Huntington Beach.
Property records indicate the deal totaled more than $200 million, in one of the area’s top real estate deals of the year.
$278M in Deals
Advanced has put the funds from the Surf City sale to use in recent months, with additional help from a $150 million private capital funding round that wrapped in October.
The company has paid $278 million across four deals this year, adding 921 units to its Southern California portfolio.
The largest of the four buys was for the 346-unit, newly built community in Chino Hills called The Crossing in Chino Hills for $130 million.
Advanced also bought a pair of complexes in Riverside. They include the 215-unit apartment property called The James. It was bought for $58 million and about $270,000 per unit.
It also bought Riverside’s 3900 Apartment Homes complex, a 120-units property that sold for $26 million;
“Between these two funds, we had around $250 million to $275 million to place which, with leverage, will lead to north of $750 million in acquisitions throughout Southern California,” Principal Paul Julian previously told the Business Journal.
The company specializes in Orange County, Los Angeles and the Inland Empire, with a market value topping $3 billion.
Paul Julian previously noted while there has been some impact on pricing as a result of lower inventory in the wake of COVID, these Southern California markets have been more insulated than other metro areas.
“Interest rates are at historic lows and there is strong demand for apartments in Southern California as investors choose suburban properties over more dense urban areas,” Julian said.
