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Friday, Dec 9, 2022

IRA Capital Pays $40M for Local Apartments

Irvine-based IRA Capital is ramping up its focus on the multifamily sector, with a recent portfolio acquisition topping $40 million in Orange County.

The deal is the first of several planned locally for the privately held real estate firm, which is gearing up to invest $1 billion in the multifamily and hospitality sectors over the next year in California.

The firm recently closed on 121 units across nearly two dozen buildings in Orange and Costa Mesa.

A private family investment trust that property records indicate is based in Corona del Mar sold the properties for about $330,600 per unit.

The portfolio was about 98% occupied at the time of sale.

“We have always liked the fundamentals in the multifamily asset class and are excited to grow our investments in this sector,” said co-founder and Principal Amer Kasm.

Long-Term Holding

The 78-unit Orange property includes 14 buildings on adjacent parcels near the intersection of Chapman Avenue and Main Street, and has been operated as a single community, officials said. The 43-unit Costa Mesa portfolio has nine buildings scattered throughout the Mesa del Mar neighborhood and one in Eastside Costa Mesa.

IRA Capital is planning exterior renovations for the portfolio that was built in the 1960s, and will upgrade units as they come online.

“Our plan is to restore the properties to create value for the community and our investors,” said Vice President Clem Butler.

It’s the second deal between the local seller and IRA Capital, which spent about $8 million last year for three apartments in Costa Mesa totaling 22 units.

$1B Investment Pipeline 

The company is looking to ramp up its holdings in the multifamily sector, which has been bolstered by the pandemic amid a lack of supply and rising rents.

IRA has more heavily focused on the healthcare sector in recent years. Its last notable medical office buy in Orange County was about a year ago, when it paid $38.4 million for a Santa Ana property.

“This healthcare and life science focus has helped us remain very active during COVID-19,” Kasm said.  

The firm is looking to back off on some of its prior investment priorities, like student housing and retail, to instead focus on investment opportunities in the hospitality, industrial and multifamily product types.

To fund these acquisitions, the company is preparing to close on a large portfolio sale across the country topping $700 million that primarily includes healthcare properties.

“Between our exchange capital and our pension and institutional funds, we have plans to buy $1 billion worth of real estate over the next year,” with a specific focus on multifamily, hospitality and office assets in Orange County and other regions in the state, Kasm notes.

“We continue to remain very bullish on California.” 

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