MIG Real Estate LLC, the real estate investment offshoot of the Merage family office, made a splash in Orange County last month with its first reported local acquisition in more than a decade, paying $61.1 million for a Costa Mesa apartment project.
Newport Beach-based MIG, which counts one other local asset in its sprawling U.S. real estate portfolio, paid roughly $442,000 per unit for Newport Palms, a 138-unit complex in Westside Costa Mesa at 1850 Whittier Ave.
It’s the largest multifamily investment for the city in over a year, and is the second priciest multifamily transaction for the county in 2023, according to brokerage data.
Walker & Dunlop represented MIG and the seller, Houston-based Camden Property Trust.
“There are very few apartment projects with over 100 units in this submarket, which resulted in an extremely competitive bidding process,” Hunter Combs, managing director of Walker & Dunlop, told the Business Journal.
MIG, which financed the deal in part from a Freddie Mac loan, is continuing to scout additional multifamily investment opportunities in Orange County, according to Combs.
“Despite turbulence in the market, investors like MIG are bullish on de-risked assets in extremely supply-constrained markets like Costa Mesa,” Combs said.
Long-Term Hold
The Costa Mesa property was fully occupied at the time of sale.
Units include one- and two-bedroom floor plans with an average size of 790 square feet.
Rents average about $2,100 for a one-bedroom unit and $2,738 for a two-bedroom unit.
It was built in 1989 and has received several upgrades from Camden over the years; MIG will continue to invest in exterior and interior upgrades of the complex, Combs said.
“This deal checked all the boxes for MIG,” Combs said.
Local Deals
The acquisition is the first for MIG in OC since 2009, when it paid $70 million for a 498-unit apartment complex in Rancho Santa Margarita, called Avila.
That project was built in 1998 and was remodeled by MIG in 2019.
Prior to the Costa Mesa acquisition, MIG’s most recent Southern California purchase was in 2021 when it paid $29.3 million for an 88-unit apartment project in Oceanside.
MIG invests in hotel, retail and industrial assets in addition to apartments in the western U.S. and Sunbelt states.
It counts a multifamily portfolio topping 7,000 units, a hotel portfolio totaling 2,000 keys, and about 3 million square feet of other commercial property types.
By the Numbers
MIG Real Estate is headed by Paul Merage’s nephew, Greg Merage.
Paul, along with his brother David, co-founded Chef America Inc., a frozen foods company that sold in 2002 to Nestlé for $2.6 billion.
After the sale, he started MIG Capital, which has nearly $2 billion in assets and is managed by his son Richard Merage.
Paul Merage’s net worth is estimated by the Business Journal to be $2.7 billion, up 4% from 2022, according to this year’s OC’s Wealthiest edition (see list, page 14). He’s likely best known locally for backing the business school at the University of California, Irvine, which counts his name.
Outside OC
MIG has been active on the acquisition and disposition front of late outside of OC.
In March, the company acquired a 156,717-square-foot industrial site in San Bernardino for $26 million.
The seven-building complex “complements the firm’s strategic investment plan for flexible industrial assets in major U.S. submarkets targeted for continued employment and population growth,” according to Kevin Stiles, director of commercial investments for MIG Real Estate.
The deal followed one in Austin, Texas, where it paid $102 million for a 545,000-square-foot portfolio totaling 13 industrial buildings and a strip mall.
It also recently sold a 124,000-square-foot medical and office campus in Nevada for $26.7 million. MIG bought that property in 2014 as part of an REO sale from Wells Fargo Bank for $17.5 million.
