Irvine’s Advanced Real Estate Services Inc. was among Southern California’s most active multifamily investors in 2020, and certainly the busiest buyer in the area in the closing months of the year.
The longtime area investor, with a regional rental portfolio approaching 10,000 units, closed out the year with a trio of Orange County apartment acquisitions totaling $136 million.
In addition to spending $64 million in November on the 240-unit River House apartment complex in Santa Ana—which the Business Journal reported on in December—Advanced in the last week of the year bought two other OC assets, paying another notable area apartment owner, Irvine’s Western National Group, approximately $72 million for apartment complexes in Westminster and Anaheim.
The December additions bring Advanced’s total 2020 investments to about $350 million, for 1,166 units across six properties.
Of the top six apartment sales in OC last quarter, Advanced was the buyer for three of them, according to data from real estate market tracker CoStar Group Inc. (see page 23).
“We are fortunate to have acquired so many properties in such a tumultuous year,” CEO Richard Julian said in a statement.
Year-End Activity
As part of the most recent two-building portfolio buy, Advanced acquired a 128-unit Westminster property and a 117-unit Anaheim project.
It paid $40.1 million, or about $313,000 per unit, for the Westminster complex called Hollybrook; it’s been rebranded as The Edward.
The project runs alongside the San Diego (405) Freeway, near Westminster Boulevard.
Advanced paid an additional $31.9 million for the Anaheim complex, or nearly $273,000 per unit. The project, formerly Rancho Vista, is now The Lincoln on Grand.
That property is near the intersection of Grand Avenue and First Street.
Advanced financed the deal in part through a loan provided by Commercial Bank of California. Both assets are two-story, garden-style properties built in the early 1970s.
Advanced is planning “an extensive renovation of both properties including new roofs, windows, siding, landscape, hardscape, new cabinets, counters, fixtures and paint,” according to a statement.
“These two properties are perfectly suited for our signature renovation program. They sit in dense, Orange County locations, and have not been upgraded since they were built,” Julian said.
2020 Buys
The portfolio buy follows Advanced’s November purchase of the Santa Ana River House project at 2111 W. 17th St.
The deal, which works out to nearly $267,000 per unit, was at the time the priciest reported apartment sale in Orange County last year, according to CoStar records. Other deals have since eclipsed it in price.
Advanced made three other apartment acquisitions last year, the largest being the 346-unit, newly built community in Chino Hills called The Crossings for $130 million.
Advanced also bought another 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.
In addition, it bought Riverside’s 3900 Apartment Homes complex, a 120-unit property that sold for $26 million.
“Financing has been incredibly favorable this year allowing us to lock in low-interest, fixed-rate, long-term loans,” Julian said. “As always, our plan is to hold all of these assets for the long term.”
Advanced now reports owning 9,745 units in Southern California. Its strategy for operating apartments: own “high-quality, safe, well-located investment properties at the best price, operate them better than our competition and hold for the long term,” according to its website.
In addition to its more affordable rental offerings, Advanced is the developer of Corona del Mar’s ultra-high-end condo project, Aerie, a seven-unit project overlooking Newport Harbor where units run more than $10 million.
More to Come
In addition to securing loans to finance deals, Advanced’s recent acquisitions were paid for in part through proceeds from a recent portfolio sale.
The Business Journal reported in November that Advanced, in partnership with Mills Land & Water, sold a collection of mobile home sites 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 past year.
Advanced generated about $100 million in proceeds from the deal, and had an additional $150 million to deploy from a private capital funding round that wrapped in October.
“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.
