ORANGE COUNTY, CA—The Mogharebi Group has sold two two-story multifamily assets built before the 1990s for high per-square-foot prices after garnering multiple offers. The properties comprise the Heights, a 30-unit complex at 704-706 West First Ave. in La Habra, and the Minnie Street Apartments, a 20-unit complex at 1426 and 1430 South Minnie St. in Santa Ana.
Mike Marcu, SVP of TMG, tells GlobeSt.com that the older buildings that attract the most investor interest are often in gentrifying neighborhoods. “The rental upside in these locations, created by shifts in the tenant base, is attractive to investors looking to add value by repositioning properties.” Marcu adds that in areas that are not yet seeing gentrification, older buildings offer the best buying metrics, which can be particularly attractive to investors looking for increased yield.
In August, the firm’s founder and president Alex Mogharebi told GlobeSt.com that Orange County’s urban core has been undergoing a renaissance. “Anaheim and Santa Ana have historically been considered the heart of Orange County. However, over the years, they have been surpassed by newer suburban communities with modern amenities.” He said that recently, a combination of both private and public investments has increased residential demand from young professionals, which in turn has increased investment demand.
Built in 1987, the Heights sold for $7.6 million, which equates to $251,833 per unit or $311 per square foot. The Minnie Street Apartments, built in 1961, sold for $3.7 million, which equates to $182,600 per unit or $256 per square foot. The buyers were private investment groups based in the South Bay and the San Gabriel Valley, respectively. The Heights, which was recently upgraded, was sold by a private-equity real estate firm located in the San Gabriel Valley, while Minnie Street Apartments was sold by a private investor located in Orange County.
“Due to its age, unit mix, and high parking ratio, the Heights was a highly sought-after asset,” said Marcu in a prepared statement. He added that the offers for this property were “far beyond seller expectations.” Also, Marcu pointed out that Minnie Street Apartments is an older core Orange County asset for which the owner was looking to reposition equity and increase returns.
Marcu represented both sides of the transaction for the Heights and the seller for Minnie Street Apartments.