Newport Beach-based investment firm Waterford Property Co. is continuing its rapid expansion into the middle-income multifamily sector, with two recent buys pushing its investment activity since late 2020 past the $1 billion mark.
The company, in partnership with the California Statewide Communities Development Authority (CSCDA), closed this month on two multifamily communities in Los Angeles totaling $335.1 million.
Waterford has now been involved in six acquisitions totaling 2,022 units and more than $1 billion in Southern California since the end of 2020.
That figure could hit closer to $1.5 billion by the end of the year, with additional acquisition opportunities in the works.
Waterford refers to the middle-income sector as “essential housing,” which aims to increase the supply of housing projects for the nation’s middle-income population, such as teachers, nurses and other civil servants, says John Drachman, who heads the company along with Sean Rawson.
The company is buying the properties through a program created last year by the new state agency CSCDA that uses tax-exempt bond financing to buy higher-end assets in the state, and lower rents for qualified existing and new residents making between 80% and 120% of the area median income.
Pasadena Buys
Waterford most recently closed on two multifamily communities in Pasadena totaling 513 units.
In the larger of the two deals, the venture paid $237 million for the Residences at Westgate, a 340-unit complex.
The deal works out to about $697,000 per unit.
It also bought The Hudson, a 173-unit complex, for $98.1 million or $567,000 per unit.
The buildings were built in 2015 and 2018, respectively.
Eastdil Secured’s Joseph Smolen, Geoff Boler, and Lee Redmond represented both sides of the first deal, while Walker & Dunlop’s Blake Rogers, Hunter Combs, Alexandra Caniglia, and Javier Rivera brokered the latter deal.
The deals followed a unanimous vote by the city of Pasadena to participate in the CSCDA program.
CSCDA Buys
Anaheim was one of the first cities to sign on to the CSCDA program, which led to four transactions in the city that closed in a series of deals totaling $545 million.
Waterford was involved in two of those deals locally; it first paired with the CSCDA at the end of last year when it acquired two recently-built Anaheim apartment projects—The Parallel and the Jefferson Platinum Triangle—for nearly $320 million combined.
Those deals are among the tops for Orange County apartment sales in recent years. Both properties sold for nearly $400,000 per unit.
The statewide CSCDA program, first introduced in Carson and Long Beach, is expected to expand to other cities in Orange County, with deals said to be in the works in Huntington Beach, Irvine and Santa Ana.
