A recently built apartment complex has traded hands in what looks to be one of the priciest per-unit deals for a multifamily property in the Irvine Business Complex.
A unit of Chicago-based Equity Residential, one of the country’s larger owners of rental properties, recently completed the purchase of the Modera Apartments, a 194-unit complex just off Jamboree Road at 2852 Kelvin Ave.
The complex opened last year and was developed by Dallas-based Mill Creek Residential. A venture headed by Prudential Insurance Co. sold the Irvine complex to Equity Residential, property records show.
The five-story property runs 200,000 square feet.
Monthly rents at the complex, which features a mix of one- and two-bedroom units, average about $2,200, according to CoStar records.
Estimate
Financial terms of the deal were not immediately disclosed. Property records suggest Modera changed hands for about $80.4 million, or roughly $414,000 per unit.
That estimate would make it the fourth-largest sale of an individual apartment complex in Orange County this year, according to brokerage data.
The deal also appears to set a new mark for apartment sales in the IBC—the 2,800-acre, largely commercial area near John Wayne Airport—in terms of per-unit pricing.
No large multifamily sales in the IBC have topped the $400,000-per-unit price in the past five years, excluding high-rise condo projects that were converted to apartment units and sold, according to CoStar records.
The last big complex in the immediate area to sell—Sofi Irvine, a 403-unit complex near Modera at 2750 Kelvin Ave.—traded hands in February for about $280,000 per unit, CoStar records show.
Sofi Irvine was built in 1988, whereas Modera is one of many projects in the immediate area that have opened in the past six years or are under construction.
More than 3,000 IBC-area apartments were under construction at the start of the month, according to city records, including several within a few blocks of Modera.
About 7,000 units in the IBC are already built. The city of Irvine enacted a 15,000-unit cap on residential development for the IBC in 2010; that leaves only a few more sites available for potential construction.
Equity Residential has yet to disclose the Modera purchase in regulatory filings, but its website lists the property as being part of its portfolio.
Local Portfolio
Its OC portfolio now has 12 complexes totaling close to 4,000 units.
David Neithercut, Equity Residential’s chief executive, said during his company’s latest last earnings call with analysts that OC is expected to be one of its best-performing markets next year in terms of rental growth.
Its local portfolio averaged monthly rents of $1,821 as of March, according to company figures. Those rents were up 5.5% from year-ago levels.
The company is set to become one of the largest apartment landlords in the area surrounding the Diamond Jamboree shopping center, thanks to its latest purchase and a new project set to come on line next year. It now owns three complexes in Irvine, including Kelvin Court Apartments, a 132-unit property a few blocks from Modera.
The company is also building 344 apartment units a few blocks from its latest purchase, on Alton Parkway. That midrise project, called The Alton, is across the street from the Diamond Jamboree shopping center and is scheduled to open in the second quarter of 2016.
Equity Residential expects to spend about $102 million, or just under $300,000 per unit, to build The Alton, according to the company’s latest annual report.
