When Gov. Gavin Newsom signed Assembly Bill 1482 into law early last month, it sent many residential landlords — along with multi-family home developers — into a tizzy.
The Tenant Protection Act of 2019’s primary task is to set an annual cap on residential rent increases across the state, which for Valley apartments and some single-family rental units will be 8.34% when the law takes effect Jan. 1, 2020.
It includes a “tenant protection law” that would require landlords evicting tenants for reasons other than “just cause” to pay them the equivalent of a month’s rent or make the last month’s rent free.
This is worrisome to residential property owners, in part because of confusion over who is affected, what to include in rent increases and how it will affect the bottom line.
There are concerns that imposing more rules and costs could stifle construction of new multi-family housing that California desperately needs.
Irony is evident
That would be ironic, as the state-wide rent control law was meant to keep rental rates down and give the state some breathing room until its housing inventory can be elevated, which in itself likely would lower or at least help stabilize rental rates.
“Rents have been rising in some communities greater than 7%, 8%, 9%, so it was only a matter of time until we saw the Legislature would want to put something into effect,” said Robin Kane, senior vice president of Fresno’s Mogharebi Group, which specializes in brokering real estate deals on multi-family housing.
On Nov. 4, he served as moderator for a group of five other local real estate experts gathered at Fresno State for a discussion put on by the university’s Gazarian Real Estate Center.
Caps in effect
The bill caps rent increases over a one-year period at 5% of the current gross rent plus the local rate of inflation as measured by the Consumer Price Index (CPI), with a maximum combined increase of 10 percent.
The CPI, which is determined every April 1 by the state Bureau of Labor Statistics, has separate numbers for the San Francisco, Los Angeles and San Diego regions, while the Valley and the rest of the state have a statewide CPI currently of 3.34%. So affected housing here could have rents raised up to 8.34%, with a maximum of two increases a year, which combined cannot exceed the cap.
As the CPI changes year to year, the cap may go up or down.
What’s going on?
Since the bill was signed into law, confusion has been the main reaction among landlords, said Greg Terzakis, senior vice president of the Central California Apartment Association.
He noted that many owners didn’t pay attention to the legislation until after the governor signed it, and “Subsequently, there has been a lot of confusion.”
Not to mention culture shock here in the Valley, where rent control isn’t as prevalent as in San Francisco and other big, urban parts of California.
Even though Terzakis said he believes rental rates tend to be high here relative to tenant income, “historically, we have not seen 8% percent a year rent increases here consistently, so I think it will affect us a little less than other places.
“And I think it will be at least through the first quarter of 2020 for people to understand how this is really going to impact their businesses.”
Holdover fees
One exception to that trend are holdover fees, where landlords charge higher rents — sometimes 30 percent or more — to tenants whose leases have expired, but they want to stay a few extra weeks or months before moving.
Kane said the state rent-control provisions apply to those agreements, too.
As for the types of residential properties affected, the law applies only to those with certificates of occupancy 15 years or older at the time the new law takes effect, and it will apply to those that turn 15 while it’s in effect.
For those properties affected, the rent increase cap applies to renewing leases, not in setting the lease prices for new tenants moving into vacant apartments.
Exemptions listed
As for what other residences are exempt, the list includes:
-Rented single-family homes and individual condominiums if the owner is not a real estate investment trust, a corporation or a limited liability company with a corporation as a member
– Single-family homes where the live-in owner rents out no more than two new bedrooms or accessory dwelling spaces: in-law suites, granny flats, etc.
– A duplex with the owner occupying at least one of the units
– Deed-restricted (affordable housing) properties
– Transient and tourist hotels
– Dormitories
– Housing for non-profit hospitals, religious facilities, extended-care facilitates
“Individual condominiums are exempt,” but if you’re leasing out units in a condominium, you aren’t, stressed Jack Schwartz, a Hanford real estate attorney specializing in rental housing.
Round down
For properties with some corporate ownership to become exempt, “you will have to talk to your real estate attorney and your tax advisor and figure how to take care of that issue,” as the law allows no exceptions, he said.
The attorney warned that in areas affected by the law, when calculating rent increases based on the maximum allowable percentages, it the amount doesn’t come out to be a whole number, it’s best to round down rather than up.
There may not be many instances where landlords opt to hike rents that much in the Valley, said Schwartz, noting that most every independent rental owner in the Valley he has spoken to about the new law has asked him, “Why would I want to raise rents that much? I’ve got good tenants.”
Eviction impacts
As such, Michael Goldfarb, CEO of Fresno-based Manco Abbott Real Estate Management, said his staff initially was concerned about AB 483, but soon, “We realized it’s probably not as bad as it could have been. From our estimation, the only real issue with this law is the just-cause eviction problem and the amount of paperwork we now have to become involved with to let the residents know what they’re going to have to expect from us going forward in the future.”
Violations of the law — including noise issues, fighting and criminal activity — are grounds to evict tenants without having to pay them anything, as are evictions for violations of their lease agreements.
“That’s a no-brainer. They’re out,” Kane said.
Evictions become trickier if non-criminal acts to justify evictions aren’t spelled out well in leases, or in cases where apartments are rented on handshake agreements.
“If anybody is operating on a non-written lease or rent agreement, even month to month, the first thing you need to do is put it in a written rental agreement,” Schwartz warned. “The days of being polite and informed are history, because now you have to pay for everything.”
It’s tricky
“Where it really becomes tricky is if I have an apartment and want to renovate it” and need to relocate tenants more than 30 days, Kane said.
Landlords have been able to evict tenants in order to do long-term renovations or repairs and then re-rent the finished units, but 1482 is changing that.
“[The renter] has a right to say, ‘I don’t want to move. If I do have to move, you owe me one month’s free rent,’” Kane said. “It’s called ‘relocation assistance.’ So that last month is free or you write them a check.”
As such, rental owners may have to decide whether to do major repairs and renovations all at once — possibly having to pay tenants one month’s rent if they’re evicted — or dealing with the added time and costs of doing the work a little at a time, as tenants move out of each unit.
But the experts noted that some construction financing agreements require such work to be done within a certain time, so if the work isn’t done all at once, they might not be able to come up with the financing to do it at all.
Into the sunset
Once AB 1482 takes effect at the start of the coming year, it will stay in effect until sunsetting after 10 years.
For his part, Kane said other problems for landlords may involve some unclear provisions, including whether ancillary fees — including those for parking and for having pets — should be included as rent in the calculations, and whether likely legal challenges and cleanup legislation to aspects of the new law may change how it’s interpreted.
While the 10 years is intended to give the state time to “get its act together,” and build more housing, “If there is not a follow-up step to build aggressively all kinds of housing — market rate, affordable, tax credit, and transitional — this problem is not going away,” Terzakis said of California’s housing crisis.
Citrus Grove Apartment Homes, a 198-unit community in Redlands, CA, traded hands for $44.5 million or $224,747 per unit. The property at 1230 E. Lugonia Ave. sold with multiple offers, according to the brokers involved in the deal.
The Mogharebi Group’s Otto Ozen, who along with Alex Mogharebi, represented the unnamed Los Angeles-based buyers and sellers, says, “Citrus Grove is located adjacent to Redlands University, a top-ranked regional university in the U.S. In addition, the property is comprised of 97% two-bedroom units with proven ‘value-add’ repositioning upside. As a result, there was a significant amount of buyer interest.”
Built in 1985, the property comprises 24 two-story buildings totaling 168,990 square feet, and is situated on an 11.74-acre site. Citrus Grove Apartment Homes features mostly two-bedroom / two-bath units. The community has a swimming pool, three laundry rooms, fitness center, combined tennis and basketball courts, sand volleyball court, leasing office, outdoor picnic areas, and private garage parking.
BAKERSFIELD, CA—The Mogharebi Group, (“TMG”) has completed the sale of Dana Apartments, a 49-unit community that is located on Dana Street in Bakersfield, CA. The property sold with multiple offers for a sales price of $5.25 million. Otto Ozen and Mark Bonas of The Mogharebi Group represented the seller, a private investment group and the buyer, both based in Los Angeles, CA.
“Due to the demand for quality living units, the property was recently repositioned through a complete renovation” says Otto Ozen, Executive Vice President of The Mogharebi Group. “As a result, the property was fully occupied, producing a solid cash-on-cash return through proven rental growth. We aggressively marketed it to our list of high net worth private clients who are currently looking for exchange up-legs, this strategy generated multiple offers and closed at 97% of list price.” Mark Bonas, Senior Vice President of The Mogharebi Group concluded, “The property represented a great value without heavy lifting for the buyer to capitalize on its full potential.”
Built on a 2.34-acre site in 1968, the Dana Apartments is located at 3600-3610 Dana Street in Bakersfield. It is located near Interstate Freeway 178, providing convenient access to all areas of Bakersfield, as well as the Central Valley and the state. Dana Apartments is approximately 10-munite drive from Adventist Health Bakersfield, the fifth largest employer in Bakersfield.
Dana Apartments features community amenities including a swimming pool, gated / controlled access, intercom entry system, 24-hour maintenance, and central laundry facility. The property offers 49 two-bedroom units and featured an attractive average unit size of 1,121 square feet.
About The Mogharebi Group: With unrivaled local knowledge, an extensive global network of top real estate investors, state of the art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
SACRAMENTO — The Mogharebi Group (TMG) has arranged the sale of The Regency Apartments, a multifamily community located at 5900 Riza Ave. in Sacramento. An undisclosed private investor acquired the property for $15.8 million.
Built in 1969 and situated on 5.4 acres, The Regency features 130 apartments in a mix of one-, two- and three-bedroom layouts.
Alex Mogharebi and Otto Ozen of TMG represented the seller, a Sacramento-based investor, in the deal.
Waterford Property Co. has acquired Hallmark at Mission, a 75-unit apartment property in Ontario, California. The property traded hands for $21 million or $355 per square foot, which is a record in the market.
Hallmark at Mission units feature in-unit washer and dryer and private garages. The community features a private clubhouse, library, business center, FiOS Internet /TV, community room with kitchen, and a cutting-edge fitness center. Its sprawling grounds include a sparkling swimming pool and relaxing spa, outdoor entertainment lounge and fireplace, mountain vistas, covered dining area with barbeques, and a private pet park.
Alex Mogharebi, Otto Ozen and Mike Marcu of TMG represented the seller, an Inland Empire based developer and the Orange County-based buyer.
CHULA VISTA, Calif. — The Mogharebi Group (TMG) has arranged the sale of Pacific Pointe Active Senior Living, a 111-unit active adult community in Chula Vista.
A San Gabriel Valley-based private investor sold the community to a Los Angeles-based buyer for $12 million.
Pacific Pointe is in downtown Chula Vista, located between San Diego and the border of Mexico. The property is within a mile of Scripps Mercy Hospital Chula Vista, Interstate 5 and over 1 million square feet of retail.
“Due to the location and quality of this property, the potential buyer pool was significant in size,” says Otto Ozen, executive vice president of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high-net-worth private clients who are currently looking for [1031] exchange up-legs.”
Alex Mogharebi and Ozen of TMG represented both the seller and buyer.
The sale of a Modesto apartment complex — for $16.5 million — might be good for the investors, but it also reflects the trend of rising rents and the shortage of rental housing in Stanislaus County.
The Mogharebi Group brokerage firm said it received multiple offers from investors on the Chardonnay Ridge Apartments on Celeste Drive because of the desirability of “super-commuter” cities on the fringe of the Bay Area.
Working adults are considered super commuters if their drive to work is 90-plus minutes one way, and an increasing number of Bay Area employees are renting housing in the cities of the Northern San Joaquin Valley. Records show that CH Sea Tac LLC purchased the 115-unit Chardonnay complex in July from a private investor in Southern California who had owned the complex for two and a half years. The seller previously purchased the two-story complex for $12.52 million in January 2017. CH Sea Tac paid $143,478 per apartment unit, or $193 per square foot of space. That’s a record for 1970s vintage apartment properties in the local market, Mogharebi said in a news release.
“There is a strong demand for this type of real estate because of the rental prices in the Bay Area,” said Brian Nakamura, a spokesman for the brokerage firm. “What you are seeing is commuters are going out from the Bay Area to Manteca and Modesto, where you have the cheaper rents.”
Nakamura said the low interest rates make it easier to finance multimillion-dollar transactions like the Chardonnay deal. The shortage of housing inventory serves to increase the value of apartment properties in the Modesto area. “A lot of owners are not selling. When they do sell, there are a lot more buyers,” Nakamura said.
Mogharebi said a private investment group from San Francisco purchased the Modesto complex. According to records, CH Sea Tac is a limited liability corporation managed by Graham Chernoff and Josie Chernoff, who are president and chief operating officer of Cumberland Holdings, respectively.
Chardonnay Ridge has one-, two- and three-bedroom apartment units, with the rents ranging from $1,050 to $1,600, according to ApartmentFinder.com.
The amenities include an outdoor pool, fitness center, covered parking and laundry facilities. Residents can send their kids to schools in Sylvan Union School District.
According to Apartment List data, 8.7 percent of the full-time work force in Modesto drove more than 90 minutes to work in 2017, an increase from 5.4 percent of the work force in 2005. The median income of those long-distance commuters was $63,000 a year, much higher than the $43,250 median income of Modesto residents driving less than 90 minutes to work.
Lexington Apartments, a 29-unit community at 1111 E. Lexington Drive in Glendale, has sold for $7.9 million, or $272,414 per unit.
CoStar data identifies the buyer as Carvajal Family Trust and seller as The San Diego Zoo Global.
Alex Mogharebi and Otto Ozen of the brokerage Mogharebi Group represented the seller, a private owner based in San Diego, and the Glendale-based buyer, a private investor.
“Due to below-market rents, very desirable location, strong unit mix and good parking, Lexington Apartments presented a tremendous value-add opportunity. Consequently, the buyer pool was significant in size,” Mogharebi Group Executive Vice President Otto Ozen said in a statement. “We generated multiple offers at full price from our pool of private and exchange buyers. Ultimately, it was a private buyer who stepped up to the plate and made the most attractive offer to the seller to win this deal.”
Built in 1973, Lexington Apartments stands at two stories with 19,375 rentable square feet. It has a mix of two-bedroom/two-baths and one bedroom/one bath units with an average size of 668 square feet, Lexington Apartments also features a swimming pool, mailroom, walkways and covered parking.
Raintree Partners has acquired a portfolio of seven multifamily properties with a combined 231 units in Glendale, Calif., for $79 million.
“We try to pick locations that are proximate to large employment bases and there’s a big job base right there in Glendale,” Aaron Hancock, Raintree Partners’ managing director, told Multi-Housing News. “It’s a short distance from Downtown L.A. and Burbank is right there with all the studio jobs, and Pasadena is close by, so you can have a reasonable commute to a lot of job centers.”
All the properties are situated in the Los Angeles submarket and were purchased from a single seller who had owned the properties for numerous years.
“The overall walkability and urbanization in Glendale over the last 10 years has brought in more retail, more downtown housing and more restaurants,” Hancock said.
The properties include the 80-unit Stanley Oaks Apartments, located at 1435 Stanley Ave.; the 54-unit Justin Oaks Apartments, located at 1133 Justin Ave.; the 33-unit Chestnut Apartments, located at 120 W. Chestnut St.; the 22-unit Galleria Pointe Apartments, located at 1140 N. Columbus Ave.; the 20-unit Burchett Apartments, located at 314-320 W. Burchett St.; the 14-unit Wilson Apartments, located at 1458-1462 E. Wilson Ave.; and the 8-unit Everett Apartments, located at 138 N. Everett St.
“These are B assets, even when renovated, but B assets in A locations are what attracts us to locations like this,” Hancock said. “It’s more of a workforce housing price point. There’s been a decent amount of new supply built in Glendale and that pipeline is really coming to an end here, as most of the sites have been built out.”
Among the renovations expected for the properties in the portfolio are painting, landscaping, signage, and deferred maintenance, with most of the money Raintree puts in going inside the units. According to Hancock, the value-add execution it is going to do is going to take place over a longer period of time than it does for most value-add groups.
“A couple of our buildings really skew heavily towards two- and three-bedroom townhouse units, geared towards families, so in those, we’re going to try and get washer/dryers installed,” Hancock said.
IN IT FOR THE LONG HAUL
One thing that makes Raintree unique is that its strategy revolves around holding properties “very long-term.”
“We intend to own these buildings for 10, 20, 30 years. Over the long-term, location is probably the single most important factor that drives returns,” Hancock said. “The B assets really are our sweet spot.”
In fact, over the last few years, the company has acquired Class B assets in Hollywood Hills, Berkley, Campbell, La Jolla and others in Glendale. The company also targets multifamily properties under 100 units.
The Mogharebi Group’s Alex Mogharebi and Otto Ozen represented the seller in the deal, while Wells Fargo provided acquisition financing for the buyer.
The sale of an apartment complex in southwest Bakersfield has set a record for the highest price paid, per unit, for a multi-family residential property in the city.
Sold recently for $22.5 million — a per-unit price of $197,500 — Mira Sol Gardens is a one-story, 114-unit complex spread over 11½ acres just south of Panama Lane along Gasol Court, Jerno Drive and Callado Lane.
“We can attribute this higher value to several factors, including a lack of available inventory, the high quality of the asset, the overall strength of the Bakersfield apartment market and the anticipated rent growth in the submarket,” stated a news release by Bakersfield’s The Mogharebi Group, which helped represent the seller, locally based LandStone Cos.
TMG’s Mark Bonas and Michael Jordan of Kidder Matthews represented the seller. The buyer, a Newport Beach-based investment group, was not identified in TMG’s news release.
The Mogharebi Group (TMG), a leading multifamily brokerage firm in California, has completed the sale of 8 properties located throughout the city of Glendale.
This press release features multimedia. View the full release here: https://www.businesswire.com/news/home/20190606005735/en/
Principals Alex Mogharebi and Otto Ozen of TMG represented the seller, a Los Angeles based private investor. The multiple buyers were investment groups based out of Orange County and Los Angeles.
The Glendale properties total 261 units and include Stanley Oaks Apartments (80 units); Justin Oaks Apartments (55 units); Chestnut Apartments (33 units); Lexington Apartments (29 units); Galleria Pointe Apartments (22 units); Burchett Apartments (20 units); Wilson Apartments (14 units); and Everett Apartments (8 units). The portfolio sold with over 25 offers and closed at a total sales price of almost $87 million.
“The sale of this portfolio continues our long and successful track record of closing large privately-owned portfolios across California,” said Alex Mogharebi, President of TMG. “This portfolio provides a substantial foothold in one of the most desirable infill submarkets in the country. Additionally, along with below-market rents and exceptional pride of ownership, the properties feature larger than average floor plans in some of Glendale’s best locations. The portfolio presents significant upside for the new owner and as a result, the portfolio attracted significant investor interest from value-add investors, institutional investors, and high net worth private capital.”
Glendale lies in the southeastern end of the San Fernando Valley, bisected by the Verdugo Mountains, and is a suburb in the Los Angeles metropolitan area and conveniently located by the 2-, 5-, 134-, 110-, and 210-Freeways, and the Studios in Burbank. Glendale was recently named L.A.’s Neighborhood of the Year by Curbed Downtown. Glendale features world-class shopping and entertainment at the Glendale Galleria and Americana at Brand. Glendale has several major hospitals including Glendale Adventist Hospital and USC Verdugo Hills. Due to its location and amenities, Glendale is poised to become a regional tech hub attracting over 1,000 high tech firms that employ approximately 41,000 people.
About The Mogharebi Group (TMG): The Mogharebi Group is a brokerage firm specializing in the multifamily property sector throughout California. With unrivaled local knowledge, an extensive global network of top real estate investors, a fully integrated platform, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
For more information visit: Mogharebi.com.
The Mogharebi Group has won Co-Star’s power broker award for the Fresno metro area. The award honors professionals with the highest transaction volume. The Mogharebi Group is a multifamily investment banking group with offices located throughout California.
One of the firm’s most recent transactions also includes the $16.9 million sale of Golden Meadow, a 196-unit apartment community in Kerman, CA, a submarket the Fresno region. The property traded to a private investor located in the Bay area. Otto Ozen of TMG represented the seller, a private investment group located in the Orange County, and the buyer.
A 38-unit apartment complex in Santa Ana has sold for $7.52 million to a private investor in Newport Beach.
The property, at 701 E. 5th St., received multiple offers, according to The Mogharebi Group, which represented both the buyer and the seller, an unidentified private investment group in Orange County.
The 5th Street Apartments, built in 1955 and 1961, is a two-building, two-story complex with 17,179 rentable square feet. Apartments come in studio, one-bedroom, and two-bedroom floor plans.
The apartments are also close to the city’s trendy 4th Street Market and downtown community.
Las Casitas Apartments, a 71-unit apartment complex in Riverside’s Magnolia area, has been sold by an Orange County-based investor to an Inland Empire-based investor for $11.55 million.
Neither the buyer nor the seller was disclosed by the brokerage, The Mogharebi Group in Costa Mesa, which represented both sides in the deal.
The complex, built in 1971, is at the intersection of Jurupa Avenue and Correll Street.
SAN BERNARDINO, Calif. — The Mogharebi Group (TMG) has arranged the sale of Bernardine Senior Independent Living, a 71-unit community in San Bernardino, approximately 60 miles east of Los Angeles.
Built in 1984, Bernadine Senior Independent Living is a four-story, 71-unit apartment community totaling 36,210 rentable square feet and situated on a one-acre site.
A private investor out of Los Angeles acquired the property for $6.8 million, or $95,423 per unit. The seller was an Inland Empire acquisition group.
“The attractive price per unit was well below replacement cost and produced strong interest from buyers,” says Otto Ozen, executive vice president of TMG. “Due to the unique nature of this asset, we generated multiple offers from both private buyers as well as affordable housing investors. Ultimately an affordable housing buyer won the deal.”
Alex Mogharebi, Otto Ozen and Bryan LaBar of TMG represented both the seller and buyer in the deal.
RIVERSIDE, CA—The Mogharebi Group, (“TMG”) has completed the sale of The Groves Townhouse Apartments, a 32-unit community that is located on Magnolia Avenue in Riverside, CA. The property sold with multiple offers for a sales price of $5.9 million or $184,375 per unit. The buyer was a Riverside based private investor.
“The Groves comprises a of all two-bed townhomes that is unique to the area, when combined with its smaller size and desirable location next to Ramona High School, the buyer pool was significant in size,” says Otto Ozen, Executive Vice President of TMG. “We generated multiple offers at full price from our pool of private exchange buyers.”
Alex Mogharebi and Otto Ozen of TMG represented the seller, a private investor based in Orange County, and the Riverside based buyer.
Built in 1984, The Groves Apartments is a two story, 32-unit apartment community that is located on Magnolia Avenue in Riverside, CA. The property comprises 8 fourplexes totaling 33,280 rentable square feet. The complex is situated on a 1.68-acre site. The Groves features all spacious two-bedroom / 1.5-bath townhomes with a large average size of 1,040 square feet. The property boasts a swimming pool & jacuzzi, 8 laundry rooms (one per fourplex), orange grove, and private garage parking.
With unrivaled local knowledge, an extensive global network of top real estate investors, state of the art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
The Mogharebi Group (“TMG”) has completed the sale of Paradise Apartments in Chico, a 164-unit community, located on West Sacramento Avenue. The property sold with multiple offers for $18,200,000 that equates to $110,976 per unit or $143 per square foot. The buyer was a private investment group out of Calabasas, Calif.
“Due to the attractive price per unit and prime location near campus, there was strong interest in the Paradise Apartments,” says Otto Ozen, Executive VicePresident of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high net worth private clients and student housing investors.” Mr. Ozen concluded, “Ultimately a student housing buyer won the deal and scored a great investment with upside. The buyer clearly saw the upside potential in the asset.”
Otto Ozen, Alex Mogharebi, and Bryan LaBar of TMG represented the seller, a Los Angeles based investment group, and the Los Angeles based buyer.
Built in 1974-1988, Paradise Apartments, a two-story, 164-unit apartment community, comprises 34 residential buildings totaling 127,572 rentable square feet and situated on a 15.1-acre site. Paradise Apartments features one, two, three, and four-bedroom units. The community also boasts three sparkling swimming pools, clubhouse with pool tables and couches, four laundry facilities, fitness center, covered parking, and a leasing office with mail center.
The Mogharebi Group, (“TMG”) has completed the sale of Canyon Springs, a 138-unit community that is located on North Figarden Drive in Fresno, CA. The property sold with multiple offers for a sales price of $19 million that equates to $137,681 per unit. The buyer was a private investment group based in San Diego. Canyon Spring Apartments is a community that is partially affordable housing with restrictions from both tax credits and bond covenants.
“The sale reflects the confidence investors have in Fresno’s Outlook in job, population and rent growth, which has outpaced core markets,” says Robin Kane, Vice-President of TMG. Otto Ozen, Executive Vice-President of TMG, also added, “Despite the restrictions imposed by LIHTC, we were able to market this asset to our diverse network of buyers, generating multiple offers and closing near the list price.”
Alex Mogharebi, Otto Ozen, Robin Kane, and Brendan Kane of TMG represented the seller, a Clovis-based private investment group, and the San Diego based buyer.
Built in 2004, Canyon Springs Apartments is a two-story, 138-unit apartment community, located on North Figarden Drive in Fresno, CA. The property comprises 14 residential buildings. The complex is situated on a 14.77-acre site. The apartment homes feature spacious two-, three-, and four-bedroom floor plans with an average size of 1,058 square feet. The property boasts a swimming pool and spa, a clubhouse, a tot lot, a business center, a fitness center, a basketball court, a volleyball court, and covered parking. The units are replete with wood laminate or vinyl flooring in the kitchen and bath areas, plush carpeting in the bedroom and living areas, washer/dryers in every unit, and balconies / covered patios.
With unrivaled local knowledge, an extensive global network of top real estate investors, state-of-the-art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
The Mogharebi Group (“TMG”) has completed the sale of Villa Plaza in Ontario, a 66-unit community, located on West 4 [th] Street. The property sold with multiple offers for $9,360,000 that equates to $141,818 per unit or $268 per square foot. The buyer was a private investment group out of the San Gabriel Valley.
“Due to the low price per unit and location, the buyer pool was large,” says Otto Ozen, Executive VicePresident of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high net worth private clients who are currently in exchange, this strategy generated multiple offers and closed at 99% of list price.” Mr. Ozen concluded, “The property represented a great value with solid upside that required a special buyer to realize its full potential.”
Bryan LaBar, Otto Ozen, and Alex Mogharebi of TMG represented both the seller, a San Diego based private investor and the San Gabriel Valley buyer.
Built in 1970, Villa Plaza is a two story, 66-unit apartment community comprises 6 residential buildings totaling 34,975 rentable square feet and situated on a 1.20-acre site. Villa Plaza features one and two-bedroom units. The community also boasts a clubhouse with full kitchen, laundry facilities, covered parking, and controlled access.
An East Coast firm has purchased a ground lease from The Bascom Group for the 138-unit Citrus Court community in Whittier.
A source familiar with the matter told The Real Deal that an undisclosed buyer purchased the lease for around $28 million. The sale closed earlier this month.
Irvine-based Bascom Group acquired the lease at 8121 Broadway Avenue for $13.4 million in 2014, according to a press release from The Mogharebi Group (TMG), which represented both parties in the transaction. The real estate website Multi-Housing News first reported the deal.
The property is on a ground lease through 2064, which means the land and property are owned by different entities. Ground leases give the lessee the right to build or redevelop property, or collect rents.
Otto Ozen, executive vice president at Costa Mesa-based TMG, said Bascom started improving Citrus Court with new amenities, and the new buyer plans to finish the renovations.
The multi-family community was built in 1967 and spans five acres. Units rent from $1,350-$2,020, and the complex features two pools, a pet park, a fitness center, and a business center.
Ozen pointed to Whittier’s education system and its improving retail mix as reasons to invest in the 15-square-mile city that’s southeast of Downtown Los Angeles near Pico Rivera.
Earlier this year, Bascom Group sold an 89-unit condominium complex in San Pedro for $36.3 million.
Over the past few years, a lot of focus on the Valley’s housing market has centered on the growth of home prices since the Great Recession.
Over that time, rental rates on apartments, duplexes and single-family homes also have steadily risen.
But figuring out how much those rents have gone up depends on whom you ask.
While the price to buy a home in Fresno County has averaged increases of about 9 percent over each of the last seven years — with a slight slowdown this year — rental website Apartment.com puts the increase in rental prices at 4.2 percent for all sizes of apartments in Fresno County this year compared to last year, and at 21 percent over the past five years.
The website also puts the five-year increase in rental rates for Tulare, Madera and Kings counties’ apartments at between 14 and 19 percent, based on prices asked for by apartment owners and property managers, though non-apartment rentals aren’t included in the estimates.
Meanwhile, another website focused on rentals, Zillow.com, factors all residences — apartments, single family, etc. — and calculates what their rental prices would be and estimates the average rental price increase in all four counties from October 2010 to October of this year at just over 4.5 percent, with Fresno County alone averaging more than a 12.5-percent increase.
Then there’s ApartmentList.com, which looking only at listed apartment rental prices, reports that in Fresno rental prices from November of last year to November of this year saw rents increase 17 percent in just that one year, on average, exceeding the state average of 14 percent over the same period and the national average of 13 percent.
Whatever the percentage, the rise in rental rates is “robust” in Fresno, Kings, Madera and Tulare counties, said Doug Ressler, director of business intelligence for Yardi Matrix Café, which, among other things, provides market research on trends for apartment buildings and complexes with 50 or more units.
In the counties combined, he said, average rents have increased 3.1 percent from the first quarter of 2017 to last month.
“Some larger metropolitan areas are not averaging that [rate]. We’re starting to see a dampening in some areas, but 3.1 percent is very aggressive and very strong,” he said.
Not that there’s much chance of the Valley rental rates exceeding those of most large California cities any time soon.
Of the 10 largest California cities, the average monthly apartment rent in Fresno is $1,030 a month, the second-lowest rate after Bakersfield, at $940 a month, according to ApartmentList.com, which lists
San Francisco and San Jose as having the highest average apartment rental rates, $3,100 and $2,650 a month, respectively.
Those high rental rates, as well as those in other part of the Bay Area, coastal areas and Southern California, are part of what’s driving up rental prices here, the experts say.
Here in the Valley, job growth has been dramatic since the recession.
“We’ve been on a tear, and over the last two years, job growth has been tremendous,” said Robin Kane, a senior vice president overseeing the Fresno and Bakersfield offices of the Mogharebi Group, a commercial real estate firm specializing in brokering sales of large apartment buildings and complexes.
He said the supply of rental units and jobs are the two primary factors affecting demand for rental units, and on the supply side, construction of new rental housing has been “meager” compared to demand here, which has helped rental rates grow.
As for jobs, the higher employment rates here are pushing up rental demand, as is the growing number of people leaving Southern California and the Bay Area for the Valley — along with parts of Nevada, Arizona and Idaho — where it’s cheaper to live, elevating demand for apartments and homes to purchase, Kane said.
“This [area] would be the last refuge of Californians,” who want to stay in the state, he added.
With all of this going on, it’s a good time to own or build residential rental properties, if you know what you’re doing.
But if you’re not building subsidized housing or units on the luxury end, building privately-funded apartments in that middle range — mostly for blue-collar families, the type most needed here in the Valley — can be tough,
Ressler noted.
“Right now, in terms of the rental market for apartments 50 units and up, in order to make it pencil out, you have to build the type As,” higher-end or luxury apartments for tenants who can afford much higher rents, he explained.
When building for working-class tenants who can’t afford those rents, “You need stipends or subsidies in order to turn profits,” Ressler said.
“And there’s not a wealth of programs to do that,” for market-rate rental developments, as opposed to affordable housing that have a systems for funding and tax breaks to promote such developments, he said.
“So what you see right now is the demand is coming in the workforce housing, and there is no one centralized effort to be able to provide that,” he said. “Usually it occurs at the city or the state level.”
Some developers, mostly in the Bay Area,
Southern California and Boston, are working around that by including “micro units” in their new apartment buildings to qualify for some affordable housing assistance.
Unlike standard apartments, micro units are bedrooms rented by individual tenants or couples who share common living rooms and kitchen areas with the other renters, Ressler said.
While residential rents in the Valley likely haven’t gone up as much as home purchase prices, renters generally are feeling the effects more than homeowners, as renters tend to have less discretionary income.
That could become a problem for apartment owners, said Kane, explaining that “You get to the point in time where you’re raising the rents above the ability of the market to increase salaries, to increase household income, so you start thinning out the numbers, so demand is diminished, not because they don’t want it,” but because people can’t afford to relocate or improve their living conditions, he said.
“The impact is not so much on the top end of the market but on the lower end of the market. Because those are the people able to least handle rent increases,” and those tenants already are experiencing the most dramatic increases in the Valley, Kane said.
And while the local rental market hasn’t quite reached that turning point, he said, “It’s getting there.”
Cathedral City Apartment Property Sells for $156k/Unit
A private investment group out of Riverside has purchased Presidio Park in Cathedral City, a
45-unit community in Cathedral City, for $7 mil, or $155.6k/unit. It was sold by a family partnership located in Cathedral City.
Built in 1987 and recently remodeled, Presidio Park is a two-story property located on Gerald Cord Drive. The complex comprises four residential buildings totaling 45.3k sf on just over three acres. The property boasts a swimming pool, tennis court, outdoor picnic area with BBQs, laundry facilities, and covered parking.
Otto Ozen and Mike Marcu with The Mogharebi Group represented both parties in the transaction.
The Mogharebi Group Sells Pomona Apartment Property
Twin Palms Apartments an 83-unit multifamily community in Pomona, CA, has traded hands for $10.4 million. The buyer was an unnamed private Manhattan Beach, CA-based investment group.
Built in 1964, Twin Palms is a two-story apartment asset comprising two residential buildings totaling 30,860 rentable square feet and situated on a 1.41-acre site. The property at 1512-1514 W. Mission Blvd. features studios and one-bedroom units, and also boasts two swimming pools, an outdoor picnic area with BBQs, covered parking, and controlled access.
The Mogharebi Group’s Otto Ozen and Alex Mogharebi represented the undisclosed seller, a San Gabriel Valley-based investment group, as well as the buyer.
Ozen says, “Due to the low price per unit, solid cash-on-cash return, and proven rental growth, the buyer pool was large. The property represented a great value with solid upside that required a special buyer to realize its full potential.”
Contact:
Brian Nakamura
Marketing Manager
909.235.7889
How hot is the Manteca apartment market?
Here are three clues:
The 91-unit Union North apartment complex on North Union Road has been sold for a record $17.2 million.
Manteca now has apartments renting for more than $2,000 a month. Paseo Villas on Atherton Drive has two floorplans renting for as high as $2,015. They are the three bedrooms, two bathroom plan with 1,292 square feet and a two bedroom, two bathroom plan with 1,217 square feet.
The smallest apartment among the complexes in Manteca built after 1970 is renting for $1,055. That’s a 460-square-foot studio apartment in Westwood Village on West Center Street. Next door in the Stonegate Apartment complex the smallest one bedroom, one bathroom apartment in the post-1970 offerings in Manteca with 538 square feet is commanding $1,265 a month.
The sale of Union North that was built in two phases — the first in 1974 and the second in 1979 — set a record price per square foot for an existing apartment complex in the Manteca-Lathrop-Ripon area. That translates into $229 per square foot or $186,957 per unit.
To put that in perspective the 164-unit Tesoro Apartments at Atherton Drive and Van Ryn Avenue now under construction is costing more than $30 million, or just over $190,000 per unit. The Tesoro complex targeted for a mid-2019 completion is being built as a luxury apartment complex in the same category of the 293-unit Paseo Villas to the west across Van Ryn Avenue.
“At a price of over $186,000 per unit, this transaction represents a record for apartment communities in the submarket. The record-setting price is attributable to several factors, including a lack of available inventory, our proprietary exchange platform, the high quality of the asset, and strong rental growth in the submarket,” said Otto Ozen, Executive Vice President of The Mogharebi Group (TMG) that handled the sale of the Union North complex. “We aggressively marketed Union North in Manteca to our list of high net worth private as well as exchange buyers. The asset provided a solid value-add opportunity and generated great interest in the market and resulted in multiple offers.”
Otto Ozen, Robin Kane and Brendan Kane of TMG represented the seller, a real estate acquisition firm located in the Bay Area and the Clovis based buyer.
Plans are now moving forward for the city’s largest ever apartment complex consisting of 400 units immediately east of Bass Pro Shops on land sandwiched between the 120 Bypass and Atherton Drive.
Union North is a one and two story, 91-unit apartment community comprised of 23 residential buildings totaling 74,319 rentable square feet and situated on a 6.55-acre site. Union North features spacious two- and three-bedroom townhomes with an average size of 817 square feet. Each unit features a washer/dryer, large private patio, and an attached parking garage. The community also boasts a swimming pool and relaxing spa, outdoor picnic area with BBQs, and controlled access.
The Union North complex’s website currently lists several two bedroom, two bathroom units with 1,655 square feet available for $1,655 to $1,680 a month.
By comparison the most expensive one bedroom, one bathroom apartment in Manteca is a 737-square-foot floorplan at Paseo Villas that’s available for $1,615 to $1,715 per month
The Mogharebi Group Retained as Exclusive Agent for 360 Unit Class A Multi-Family Portfolio in Visalia
THE MOGHAREBI GROUP has been retained as the exclusive listing agent for a portfolio that is composed of 3 Class A quality properties totaling 360 units in Visalia.
Each of the properties features similar floor plans and construction. The properties were built from 2007 to 2008. They are located within 2 miles of each other, providing good operational scale.
“This portfolio comprises the most desirable properties in Visalia,” said Alex Mogharebi, Founder and President of The Mogharebi Group. “Each of the properties features spacious floor plans and exquisite amenities. This portfolio offers investors the opportunity to acquire a large Class A quality portfolio in the best submarket in the Central Valley.”
Contact:
Brian Nakamura
Marketing Manager
909.235.7889
SANTA BARBARA, Calif.–(BUSINESS WIRE)
THE MOGHAREBI GROUP has been retained as the exclusive listing agent for the largest privately owned multifamily portfolio that has been available in the UC Santa Barbara market in years.
View the full release here:
https://www.businesswire.com/news/home/20180829005470/en/
The portfolio comprises 10 individual properties totaling 100 units in the coastal community of Isla Vista, that is the residential location of choice for UC Santa Barbara students.
“Student housing in Santa Barbara is among the most compelling investments I’ve seen,” said Alex
Mogharebi, Founder and President of The Mogharebi Group. “This portfolio offers investors the
opportunity to acquire 100 units in an extremely supply constrained submarket providing uncommon
economies of scale for the area. Due to the premiere location, unit mix, and quantity, conversion to
student housing provides the right investor significant upside in one of the most desirable student
housing markets nationally.”
The Mogharebi Group Retained as Exclusive Agent for 500+ Unit Prime Multi-Family Portfolio in Southern California
THE MOGHAREBI GROUP has been retained as the exclusive listing agent for one of the largest privately-owned multi-family portfolios in Southern California. The portfolio spans across the South Bay and Glendale regions of Southern California with 27 individual properties totaling over 500 units making it one of the largest portfolios of its kind in California. Many of the properties are on the market for the first time in over a decade.
The properties are well positioned and located in several high demand areas of Southern California including: Redondo Beach, Hermosa Beach, Lomita, Carson, and Glendale.
“This is a unique offering in today’s market,” said Alex Mogharebi, Founder and President of The Mogharebi Group. “This portfolio offers investors the opportunity to acquire a critical mass number of units in core markets and benefit from the strong and diverse economic drivers for each assets’ location. This opportunity allows future investors to focus on the unique value-add opportunity and capitalize on the strong market trends.”
Contact:
Brian Nakamura
Marketing Manager
909.235.7889
COALINGA, Calif.–(BUSINESS WIRE)
The Mogharebi Group (“TMG”) has completed the sale of Coaling Station B, a 105-unit community that is located on Truman Street in Coalinga, CA. The property sold with multiple offers for a sales price of $7.9 million. The buyer was a private investment group based in the Bay Area.
“Due to the high quality of the community, low price per unit, and high cash-on-cash return, the buyer pool was large,” says Otto Ozen, Executive Vice President of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high net worth private clients who are currently looking for exchange up-legs, this strategy generated multiple offers and closed at over 99% of list price.” Mr. Ozen concluded, “The property represented a great value with solid upside that required a special buyer to realize its full potential.”
Otto Ozen and Nazli Santana of TMG represented the seller, a Northern California based private investor and the Bay Area-based buyer.
Built on a 7.0-acre site in 1987, Coaling Station B is located at 250 Truman Street in Coalinga. It is located adjacent to Highway 33, which is a 10-mile drive to Interstate 5. Interstate 5 connects Coalinga to the rest of the Central Valley. Coaling Station B is adjacent to West Hills College Coalinga, which is a public two-year community college providing higher education and sports facilities to area residents.
Coaling Station B features community amenities including a tennis court, basketball court, swimming pool, clubhouse, outdoor picnic area with barbeque, laundry facilities, garages, covered parking, and a rental office. The property offers 8 one-bedroom, 70 two-bedroom one-bath, 18 two-bedroom two-bath, 8 three-bedroom two-bath, and 1 four-bedroom two-bath units with an average unit size of 855 square feet. There are approximately 8 units that are newer, which feature washer/dryers, garage parking, and granite countertops.
With unrivaled local knowledge, an extensive global network of top real estate investors, state-of-the-art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180712005210/en/
THE MOGHAREBI GROUP NAMED AS 2017
COSTAR POWER BROKER AWARD WINNERS
Costa Mesa, CA – Costar, the largest organization serving commercial real estate, has awarded The Mogharebi Group with the 2017 CoStar Power Broker Award for the Orange County (SoCal) and Central Valley Markets.
The award recognizes the most active firms and individual dealmakers in the United States each year. This years’ award winners include Founder Alex Mogharebi for the Orange County market, Otto Ozen, Executive Vice President, for the Orange County market and Robin Kane, Senior Vice President, for the Central Valley market.
“It is both an honor and a pleasure to have been selected by CoStar as the leaders in the Orange County and Central California regions. We could not have achieved this success without the partnership of our loyal and dedicated clientele,” says founder and President, Alex Mogharebi.
“Our focus on building sustained long-term relationships over transactions and quality over quantity has had a big impact in helping our clients create wealth,” said Executive Vice President, Otto Ozen. “We look forward to continued success with our clients for many years to come.”
“The Central Valley team has won the CoStar Power Broker Award every year since 2010.” says Robin Kane. “We have always utilized many of the tools Loopnet | CoStar have created to better understand the dynamics driving demand in our Market.”
“With such an active year in commercial real estate, CoStar is proud to honor the firms and brokers who performed at the industry’s highest level,” said CoStar Group founder and CEO Andrew C. Florance. “These industry leaders deserve to be recognized for their hard work, expertise and superior deal-making abilities. We extend our congratulations to this year’s winners on their hard-earned achievement.”
For more information on The Mogharebi Group, please visit – www.Mogharebi.com
Or Contact:
Brian Nakamura
Marketing Manager
909.235.7889
The Mogharebi Group, (“TMG”) has completed the sale of Casa Del Sol Apartments, a 205-unit community that is located on Freemont Street in Bakersfield, CA. The property sold with multiple offers for a sales price of $12.225 million. The buyer was a private investment group based in the San Fernando Valley.
“Due to the low price per unit, solid cash-on-cash return, and proven rental growth, the buyer pool was large,” says Otto Ozen, Executive Vice President of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high net worth private clients who are currently looking for exchange up-legs, this strategy generated multiple offers and closed at 98% of list price.” Mr. Ozen concluded, “The property represented a great value with solid upside that required a special buyer to realize its full potential.”
Alex Mogharebi, Otto Ozen, Robin Kane, and Mark Bonas of TMG represented the seller, a San Diego-based private investment group, and the San Fernando Valley-based buyer.
Built on a 7.15-acre site in 1965, the Casa Del Sol is located at 2601 Fremont Street in Bakersfield. It is located near State Highways 99 and 58, providing convenient access to all areas of Bakersfield, as well as the Central Valley and the state. Casa Del Sol is approximately six miles southeast of California State University, Bakersfield.
Casa Del Sol Apartments features community amenities including a swimming pool, gated/controlled access, intercom entry system, security cameras, 24-hour maintenance, and central laundry facility. The property offers 111 studio units, 93 one-bedroom units, with an overall average unit size of 402 square feet. The units feature refrigerators, air-conditioning, and over-sized closets. The property was recently renovated with new exterior paint, pool furniture, landscaping, irrigation, and improvement of a select number of units.
With unrivaled local knowledge, an extensive global network of top real estate investors, state of the art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
A 238-unit apartment community in northwest Fresno has sold for more than $20.4 million.
That comes out to $85,966 per unit — or just under $89 a square foot — making The Enclave apartments sale the highest per-unit price paid so far this year for any multi-family building in the Valley, according to Fresno’s Mogharebi Group, which brokered the sale to a private investment group out of the San Diego area.
The brokers didn’t identify the buyers.
“The combination of record job and population growth against historically-low new apartment starts creates massive pricing power for existing communities like The Enclave,” Robin C. Kane, senior vice president of TMG, said in a written statement. “We aggressively marketed The Enclave to our list of high net worth private as well as exchange buyers. This strategy generated multiple offers and closed at near full list price.”
The apartments, at 3274 W. Ashlan Ave., were built in 1978 and sit on 18.2 acres. The recently remodeled two-bedroom units range in size from 965 to 988 square feet. The complex includes two pools and spas, a business center, a fitness center, a basketball court, a tennis court, a playground, two laundry facilities and a dog park.
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.
The Mogharebi Group Retained as Exclusive Agent for 100 Unit UC Santa Barbara Portfolio
SANTA BARBARA, Calif.–(BUSINESS WIRE)
THE MOGHAREBI GROUP has been retained as the exclusive listing agent for the largest privately-owned multifamily portfolio that has been available in the UC Santa Barbara market in years.
The portfolio comprises 10 individual properties totaling 100 units in the coastal community of Isla Vista, that is the residential location of choice for UC Santa Barbara students.
“Student housing in Santa Barbara is among the most compelling investments I’ve seen,” said Alex Mogharebi, Founder and President of The Mogharebi Group. “This portfolio offers investors the opportunity to acquire 100 units in an extremely supply constrained submarket providing uncommon economies of scale for the area. Due to the premiere location, unit mix, and quantity, conversion to student housing provides the right investor significant upside in one of the most desirable student housing markets nationally.”
Contact:
Brian Nakamura
Marketing Manager
909.235.7889
BAKERSFIELD, CA—Autumn Glen and Serena Vista, comprising a total of 250 units, were the last two Bakersfield properties in the Bascom Group portfolio. Both assets sold this summer for a combined price of about $25 million, representing 96% of the asking price and below replacement cost.
Mark Bonas, who recently joined The Mogharebi Group as senior vice president, represented the Bascom Group in the disposition of all six of the total Bakersfield assets. After the sale was finalized, Otto Ozen, executive vice president at The Mogharebi Group, offered added insight into the Central Valley market in this exclusive.
GlobeSt.com: What do investors look for in a Central Valley investment?
Ozen: Within the Central Valley, investors are looking for yields and leverage that are unavailable in core California markets. They are looking to get maximum leverage, with agency loans that are near 75% to 80% loan-to-value ratio. With high leverage, double digit cash-on-cash returns are common. Investors are attracted to properties with amenities that are uncommon elsewhere like washer/dryers in the units and large average unit sizes with townhome floor plans. They prefer premier locations within the Valley that act as metropolitan centers or are near the Bay Area or Southern California. These markets include Modesto, Fresno, Bakersfield and Visalia.
GlobeSt.com: Which areas of the Central Valley are most attractive for near-term investment?
Ozen: Visalia, Tulare and Hanford are particularly attractive investment markets. Each city features historical downtown areas and has a desirable retail mix that continues to improve. A major driver of interest in the area is the Kings–Tulare regional station, which will serve as a regional hub for the California high-speed rail system, and will be located at a site that is in between Hanford and Visalia. The new rail system is expected to be a boon for the Central Valley because it will reduce the commute into the Bay Area to a realistic level, thus increasing demand for housing from higher income residents.
Hanford has been receiving additional interest as Faraday Future has leased the old Pirelli factory to manufacture electric cars there. The new factory is being renovated, with significant work planned in 2018. When complete, it is expected to employ up to 1,300 workers and build up to 10,000 cars per year.
Modesto, Merced and Stockton are also attractive markets due to the proximity to the Bay Area, which is pushing commuters further out due to pricing pressures. Bakersfield is attracting investors as renters are being priced out of Los Angeles.
GlobeSt.com: What recent developments have you seen taking place in the Central Valley that might affect real estate markets?
Ozen: The Central Valley is experiencing a surge of interest from buyers looking for yields that are better than those that are available in the core markets in the Bay Area and Southern California. Starting in Q2 2017, we observed a significant spike in monthly sales volume that dwarfs the previous record for the same period that was set in 2015. We believe this increase is attributable to buyer and seller expectations that appear to be more aligned than they are in core markets. Investors appear to have discovered more compelling investment fundamentals in the Central Valley than are currently available in the Bay Area and Southern California.
MORENO VALLEY, CA—The Mogharebi Group, (“TMG”) has completed the sale of Baywood Villas, a 56-unit community, that is located on Bay Avenue. The property sold with multiple offers for a sales price of $10,700,000 that equates to $191,071 per unit or $196 per square foot. The buyer was a private investment group based in Northern California.
“At a per unit price of $191,071, this transaction represents a record price for apartment communities in the Moreno Valley area. The prior record was set at $202,500 per door for a new class-A property, that was built in 2007, and sold near the market peak in 2007. The record setting price is attributable to several factors, including a lack of inventory available, our proprietary exchange platform, the high quality of the asset, and strong rental growth in the submarket” says Otto Ozen, Executive Vice President of TMG. “We aggressively marketed Baywood Villas to our list of high net worth private as well as exchange buyers. This strategy generated multiple offers and closed near full price.”
Alex Mogharebi and Otto Ozen of TMG represented the seller, a real estate development firm located in the Inland Empire.
Built on a 3.57-acre site in 2007, the property is located at 22945 Bay Ave in Moreno Valley. Baywood Villas features lavishly outfitted units. Amenities include refrigerator, dishwasher, gas range/oven, granite counter top, premium kitchen cabinet, full-size washers/dryer, built-in microwaves, nine-foot ceiling, mirrored closet, central air-conditioning/heating, built-in wall desks, tiled kitchen/bathroom flooring, double paned windows, and patios/balconies. The community features exquisite common area amenities including two resort-style swimming pools, a hot tub, a barbecue area, a clubhouse, a business center, a gym, an on-site leasing office, and a gated access.
With unrivaled local knowledge, an extensive global network of top real estate investors, state of the art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
COSTA MESA, CA—Anaheim and Santa Ana have historically been considered the heart of Orange County, but have been surpassed by newer suburban communities with modern amenities—but that’s all changing now, the Mogharebi Group’s founder and president Alex Mogharebi tells GlobeSt.com. The firm reports that there has been roughly $6 billion in redevelopment in Anaheim recently, and the Santa Ana is urbanizing so much that it is planning to add a streetcar system to its infrastructure. We spoke with Mogharebi about the renaissance of Orange County’s metropolitan core and where he sees it heading.
GlobeSt.com: How would you describe what’s been happening in the metropolitan core of Orange County
from a real estate perspective?
Mogharebi: 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. Recently, a combination of both private and public investments has increased residential demand from young professionals, which in turn has increased investment demand. Orange County’s urban core is undergoing a renaissance. There are several significant developments that are under construction or planned within Anaheim: Disneyland’s $1.5-billion addition of Star Wars Land, a $200-million expansion at the Anaheim Convention Center, approximately 1,000 luxury-hotel rooms planned near Disneyland for a total cost of about $2 billion, and a $2.4-billion pedestrian-oriented development that is planned for the Platinum Triangle. Additionally, Santa Ana has benefitted from an improved retail mix in its Downtown, which is an increasingly desirable area due to its comparably affordable housing and great proximity to jobs.
Within the Mogharebi Group platform, we have observed significant interest in central Orange County. We have recently marketed and sold the 116-unit ECHO in Anaheim and the 84-unit Tustin View in Santa Ana. Each of these properties received almost a dozen offers and sold for nearly 97% of list price. The winning bidder for each property was an exchange buyer who was willing to step up in price to purchase a desirable property at these burgeoning locations. TMG is currently marketing the 84-unit BLOC Apartments in Anaheim near Disneyland and the 55-unit Vista Royale and 20-unit Minnie Street apartments that are both located near Downtown Santa Ana.
GlobeSt.com: How do you see this submarket evolving over the next few years?
Mogharebi: Orange County has historically been a hub for businesses operating in the finance, insurance, and real estate (also known as FIRE) sectors. In the most recent cycle, growth in FIRE-heavy markets has lagged in comparison to markets with a high concentration of technology and creative jobs. Orange County has been no exception. However, with significantly higher office rent in the tech market of Silicon Valley, we anticipate technology and creative firms will increasingly expand into Orange County. According to NAR, residential real estate in OC is also more affordable, with a median home price of $750,000 compared to $1,070,000 in San Jose. Over the next few years, we expect that Orange County’s employment base will diversify with more tech
and creative jobs. As this trend progresses, we anticipate the affordability gap between Orange County and the Bay Area to decline.
GlobeSt.com: What infrastructure changes are occurring here that could influence real estate?
Mogharebi: Santa Ana has plans for the OC Streetcar that will service the city’s historic Downtown by 2020. This investment will enhance mobility and increase pedestrian-oriented development. It will help shape Downtown Santa Ana into a premier destination for entertainment, shopping, and dining. California’s high-speed rail is scheduled to start passenger service from Anaheim to Los Angeles in 2029. It is expected that Orange County will gain almost 23,000 jobs by 2030 because of the high-speed rail.
GlobeSt.com: What else should our readers know about this submarket?
Mogharebi: Orange County is a land- and supply-constrained market with properties that are currently undervalued when compared to the tech-heavy markets nationally. Due to the combination of Orange County’s desirable climate, well-educated workforce and less traffic congestion, it is a relative bargain with superior upside in comparison to the Bay Area or even nearby Los Angeles.
LANCASTER, CA—The Mogharebi Group, (“TMG”) has completed the sale of the Racquet Club Apartments, a 200-unit community, that is located on 15th Street West. The property sold with multiple offers for a sales price of $21,000,000 that equates to $105,000 per unit or $116 per square foot. The buyer was a private investment group based in Los Angeles, CA.
“At a per unit price of $105,000, this transaction represents a record price for communities that are over 30 units in the Lancaster / Palmdale area. The prior record was set at $104,000 per door during the last market cycle in 2004. This record setting price is attributable to several factors, including a lack of inventory available for exchange buyers in the market, The Mogharebi Group’s proprietary exchange buyer platform, the property’s stellar location being adjacent to the Antelope Valley Hospital, and strong rental growth in the submarket” says Alex Mogharebi, President of TMG. “We aggressively marketed Racquet Club to our list of high net worth private clients who are currently looking for exchange up-legs. This strategy generated multiple offers and closed near full price.”
Alex Mogharebi and Otto Ozen of TMG represented the seller, a private equity real estate firm located in Santa Monica and the Los Angeles based private buyer.
Built on a 9.65-acre site in 1973, the property is located at 44045 North 15th Street West in Lancaster. The community features exquisite common area amenities including two large resort-style swimming pools and hot tubs, two tennis courts, 24-hour state-of-the-art fitness center, business center with computers and printers, secured access, and reserved covered parking.
With unrivaled local knowledge, an extensive global network of top real estate investors, state of the art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
Central Valley, CA—The Mogharebi Group, (“TMG”) has completed the sale of a portfolio comprising 450-units in 3-complexes that are located throughout the Central Valley. Kings Pointe, a 104-unit community, is located on Harold Street in Kingsburg. Oak Valley, a 109-unit property, is located on East Cross Avenue in Tulare. Oak View, a 237-unit complex, is located on West Caldwell Avenue in Visalia. The portfolio sold with multiple offers at above list price for a total sales price of $46.8 million. Alex Mogharebi and Otto Ozen of TMG represented the seller, a San Diego based private investor. The buyer was a Central Valley based private investment group.
“The closing of this portfolio deal solidifies The Mogharebi Group’s place as the preeminent broker for properties over $5 million in the Central Valley,” says Alex Mogharebi, President of TMG. “The 450-unit portfolio attracted significant investor interest because the 3-properties provided the scale necessary for even an outside investor to run highly profitable operations in this tertiary, yet stable market that continues to grow. Additionally, the properties have been owned long-term through solid operations, and presented significant upside with improved management.” Mr. Mogharebi continued, “Increasingly, more investors are attracted to the Central Valley for higher yield and leverage that is not present in the coastal markets of Northern and Southern California. The Mogharebi Group’s experience in this market and access to investors below the radar make us the ideal platform for investors in this thriving region.”
Built on a 4.44-acre site in 1987, Kings Pointe is located at 901 Harold Street in Kingsburg. While Oak Valley is situated on a 7.06-acre site at 2001 East Cross Avenue in Tulare, Oak View is located at 4700 West Caldwell Avenue on a 16.46-acre site in Visalia. All three properties are near to significant employment. The properties feature attractive community amenities, including sparkling swimming pool and hot tub, 24-hour state-of-the-art fitness center, and reserved covered parking.
With unrivaled local knowledge, an extensive global network of top real estate investors, state of the art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
MODESTO, CA—The Mogharebi Group, (“TMG”) has completed the sale of The Commons Apartment Homes, a 100-unit community on Standiford Avenue, and Summerview Apartment Homes, a 136-unit community on Prescott Road, in Modesto, CA. The two properties sold together for $32,568,000 with multiple offers. Alex Mogharebi and Otto Ozen of TMG represented the seller, a Massachusetts based investor. The buyer was a private investor based in the Southern California
“This sale represents a near record setting price for this cycle in Modesto,” says Alex Mogharebi, President of TMG. Mr. Mogharebi concluded, “The strong rental growth and relative value attracted significant investor interest in these two assets. I anticipate continued growth in this submarket as price and yield play catch up with the Bay Area, which is priced well above its pre-recession level. The buyer did very well to acquire the significant high-quality foothold that these properties represent in this promising market.”
Built on a 4.33-acre site in 1989, The Commons is located at 1600 Standiford Avenue, while Summerview is situated on a 5.03-acre site on Coffee Road. They both have significant exposure on their fronting roads, with over 35,000 and 20,000 cars per day, respectively.
The properties feature attractive community amenities, including a sparkling swimming pool and hot tub, 24-hour state-of-the-art fitness center, and reserved covered parking. Both complexes are located within two miles from Highway-99, shopping / jobs at Vintage Faire Mall, Kaiser Permanente Medical Center, and Central Valley Plaza.
With unrivaled local knowledge, an extensive global network of top real estate investors, state of the art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
The Mogharebi Group, (“TMG”) has completed the sale of Tustin View Apartments, an 84-unit community that is located on Ponderosa Street in Santa Ana, CA. The property sold April 12 for $22,375,000 with multiple offers. Alex Mogharebi of TMG represented the seller, a Los Angeles-based private investor. The buyer was a private investor in exchange based in Northern California.
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“Due to the location and quality of this property, coupled with the proven value-add program, the potential buyer pool was significant in size,” says Alex Mogharebi, President of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high net worth private clients who are currently looking for exchange up-legs. This strategy generated multiple offers and closed near the list price.” Mr. Mogharebi concluded, “There was tremendous investor interest in this property. Thus, the owner cherry picked the winning bidder based on a combination of price, terms and closing certainty.”
Built on a 2.83-acre site in 1968, the property is located at 2010 Ponderosa Street in Santa Ana. The neighborhood is north of Interstate-5 in Santa Ana in close proximity to Tustin. It is served by Tustin School District. Tustin View is near to numerous neighborhood retailers including Shabu Shabu Bar, Chipotle, Claim Jumper, Tutto Fresco, and Zov’s Bistro. It is a short drive to Disneyland, CHOC, Westfield Main Place Mall, Orange County Civic Center, and the Outlets at Orange.
Tustin View Apartments features attractive community amenities including a large sparkling outdoor pool with a resort-like cabana, barbecue areas, two 24-hour laundry centers, state-of-the-art fitness center, reserved covered parking, and controlled access.
With unrivaled local knowledge, an extensive global network of top real estate investors, state of the art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
The Mogharebi Group (TMG) completed the sale of Country Club Apartments, a 79-unit community located at 160 East Parkdale Ave. in San Bernardino, CA. The property, built on a 5.44-acre site in 1986, sold for $9.6 million.
TMG’s Alex Mogharebi says, “The property is in the desirable CSU submarket of San Bernardino that has been seeing some solid rent growth the last couple years. Country Club was particularly appealing to the buyer because of its large floor plans with washer/dryer hookups making it conducive for a value-add strategy.”
Mogharebi and Otto Ozen represented the seller, an unnamed Orange County based private equity group, as well as the the buyer, an undisclosed Los Angeles based syndicator.
INDIO, CA — Indio is one of the most populous cities in the Coachella Valley, and there is an increasing amount of activity in the area because of growing festival activity, the Mogharebi Group’s president Alex Mogharebi tells GlobeSt.com. The firm recently completed the sale of Mountain View Cottages, a 311unit apartment community located on Arabia St. here, on behalf of the buyer, a Simi Valleybased private investor.
The property sold with multiple offers for $15.5 million. We spoke with Mogharebi about the Indio multifamily market and what tenants and investors in this market seek.
GlobeSt.com: How would you characterize the Indio multifamily market?
Mogharebi: Indio is also the most populous city in Coachella Valley. It has a population of more than 85,000 people that is expected to rise to more than 140,000 by 2030, reflecting an annual growth rate of almost 6% per
year that is significantly above the national average at 1%. Multifamily properties represent a relatively small market share at approximately 25% of residential units. The Indio submarket comprises mostly workforce
housing, senior housing, affordable housing and shortterm rentals (for snowbirds). There is increasing amount of activity in the area because of growing festival activity. There is also a secular growth trend in the area fueled by the aging Baby-Boomer population that finds Indio attractive due to its relative affordability and its warm weather.
GlobeSt.com: Who are the typical multifamily tenants there, and what are they seeking in an apartment?
Mogharebi: Workforce tenants comprise the largest portion of the market. They are employed mostly in the retail, education, construction and leisure sectors. These tenants like a functional design and a large unit size that can accommodate a family at a reasonable price. Unit amenities such as washer/dryer and multiple bathrooms and common-area amenities such as a swimming pool and fitness gym are in demand as well.
Seniors are typically retired and have their primary residence here, while short-term rental tenants or live within three hours of the area and have second homes here. They like discretionary finishes such as granite countertops, while a large unit size is less important.
GlobeSt.com: What does the investment market there look like?
Mogharebi: Recently, Indio has been a strong investment market due to increased demand from the growing number of festivals here that include the Coachella Music Festival, Stagecoach and Desert Trip (the newest addition). These events attract more than 12 million visitors annually, who generate more than $4 billion per year and employ more than 19,000 people here. Due to the aging Baby-Boomer population, there is also the secular growth trend in senior housing. These new demand drivers represent a shift from the old normal, where Indio was a slow-growth market that attracted investors seeking higher yields. It now represents a solid growth opportunity in addition to providing value.
GlobeSt.com: What else should our readers know about the Indio multifamily market?
Mogharebi: Despite the increased investment demand, Indio still offers investors an opportunity to acquire properties at a lower price on a pound-for-pound basis and still receive higher yields than are available in the primary markets to the west. There are approximately 25 million people within a 2.5-hour drive of Indio, making it a convenient getaway and retirement area. Thus, Indio’s long-term growth rate is stronger than average due to the expected growth in retirees and vacationers.
INDIO, Calif. (BUSINESS WIRE) The Mogharebi Group (“TMG”) has completed the sale of Mountain View Cottages, a 311-unit community that is located on Arabia Street in Indio, CA. The property sold with multiple offers for a sales price of $15.5 million. The buyer was a Simi Valley based private investor.
“Due to the low price per unit and attractive yield of this property, the potential buyer pool was significant in size,” says Alex Mogharebi, President of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high net worth private clients several of whom are in exchange. Not only did the property have a strong going in yield, it also provided upside with improved management and renovations. Additionally, the neighborhood is experiencing growth due to new construction that is fueled by tourism demand from the increasing festival activity in the area.”
Alex Mogharebi and Otto Ozen of TMG represented the seller, a private investment group based in the San Gabriel Valley, and the Simi Valley based buyer.
According to Alex Mogharebi, “This sale demonstrates that private investors are outpacing other buyer types even through a rising-interest rate environment.”
Built on a 12.42-acre site in 1965, Mountain View Cottages is located at 46289 & 46299 Arabia Street in Indio. The community is near to the Indio Fairgrounds and the Larson Justice Center. It is minutes to the Empire Polo Club which is the site of renowned festivals including Coachella, Desert Trip, and Stagecoach.
Mountain View Cottages offers the finest in common area amenities. There is a sparkling swimming pool and a fun playground that is surrounded by a tropical landscape and beautiful mountain views. All the units are bungalow style, meaning that residents don’t share a wall with other units.
With unrivaled local knowledge, an extensive global network of top real estate investors, state-of-the-art technology, and direct access to capital, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.
Historically workforce oriented, the North County San Diego submarket of Vista has been transitioning to young professionals, the Mogharebi Group’s founder and principal Alex Mogharebi tells GlobeSt.com. The firm recently represented seller Pacific Development Partners LLC in the sale of Mesa Garden, a 124-unit apartment complex here, for $24.2 million to a private investment group based in San Diego. The sale price was 97% of list price. We spoke exclusively with Mogharebi about the Vista multifamily market and how it’s changing as North County becomes more popular for investors.
GlobeSt.com: How would you characterize the multifamily investment market in Vista?
Mogharebi: The Vista investment market is in transition. The Vista submarket is historically workforce oriented. Recently, the area has been transitioning to young professionals.
GlobeSt.com: Are there any new multifamily developments or exciting redevelopments happening in this market?
Mogharebi: In North County, there are several large projects that are presently under construction and total more than 1,000 units. To me, the most exciting properties in the market are the redevelopment opportunities that exist in older product in North County. These properties are exciting because they provide an opportunity to create value while remaining competitive against newer developments that command top-of-the-market pricing.
GlobeSt.com: What elements of this submarket are drawing in investors?
Mogharebi: Comparative affordability, improving retail mix and job growth are major drivers of new investment in this market. Another significant driver that is underway is improving infrastructure that will reduce commute time and increased connectivity to surrounding areas.
GlobeSt.com: What else should our readers know about the multifamily market in Vista?
Mogharebi: The SR-76 expansion is under construction and is going to improve drive times into surrounding areas, which will open up new jobs to local residents.
Steady gains in the US economy have resulted in net positives for the multifamily sector-will this wave continue for the foreseeable future? What’s driving development and capital flows? Join us at RealShare Apartments on October 19 & 20 for impactful information from the leaders in the National multifamily space. Learn more.
International Village, a UC Riverside-area apartment complex, has been sold to a private group based in the San Gabriel Valley.
The Mogharebi Group completed the sale. In a release, the company said the property sold for $20 million -about $217,000 per unit. The company says the property is on a ground lease from the university through 2049, making it exempt from property taxes.
The 124-unit Mesa Garden apartment complex in Vista, CA, has sold to a locally based private investor for $24.2M, or $195k/unit. The complex at 800 East Bobier Drive is near the intersection of Vista Way and close to state Highway 76, I-78 and I-5; Mira Costa College; TriCity Medical Center; and The Triangle and Vista Village shopping centers, as well as a short drive to the Pacific Ocean.
“Northern San Diego County has been slow to recover, but has recently become one of the hottest submarkets in Southern California,” says The Mogharebi Group president Alex Mogharebi. He, along with TMG VP Otto Ozen, repped the seller, Pacific Development Partners. Alex says rents are soaring along the I-78 Corridor due to being near employment, strong local job growth and comparative affordability.
He says the complex had multiple offers and sold at 98% of asking price. The complex was partially renovated in 2015, and with the completion of renovations and the project’s high-end amenities, Alex says it will command rents competitive with new product. Amenities include a pool, a spa, a sauna, a clubhouse, a billiard room, a fitness center, and basketball and tennis courts. Units feature plush carpeting or wood flooring, ceiling fans, dishwasher-disposals and refrigerators, and renovation is adding washer/dryer hookups in two-bedroom units.
The Mogharebi Group, has completed the sale of Mesa Garden, a 124-unit apartment complex. The $24.2 million sales price equates to $195,000 per unit. The buyer was a private investment group124-unit apartment complex built in 1977, brought $195,000 per unit.
Northern San Diego County has been slow to recover but has recently become one of the hottest submarkets in Southern California, says Alex Mogharebi, president ofTMG.
“The current momentum is due to close proximity to employment, strong local job growth, and comparative affordability,” Mogharebi said. “Consequently, rents have been soaring in the 1-78 Corridor and because of the property’s high-end common area amenities and a proven renovation program, the new owner will be able to renovate units to be more competitive with new development in the immediate submarket.”
Mogharebi and Otto Ozen of TMG represented the seller, Pacific Development Partners. The Mogharebi Group also procured multiple offers and ultimately, the buyer at 97% of list price.
Built on more than seven acres in 1977 and partially renovated in 2015, the property is located at 800 East Bobier Drive in Vista near east Vista Way. In close proximity to Highways-76 and -78, Interstates-5 and -15, Mira Costa College, the TriCity Medical Center, The Triangle and Vista Village shopping centers, and the Pacific Ocean.
Community amenities at Mesa Garden include a sparkling swimming pool, soothing spa, rejuvenating sauna, club house, billiard room, fitness center, full basketball court, and tennis court. Each unit features plush carpeting or wood flooring, ceiling fan, dishwasher / disposal, and refrigerator. Washer / dryer hookups can be renovated in the two bedroom units.
The Mogharebi Group (TMG) has completed the sale of Mesa Garden, a 124‐unit apartment complex, for $24.2 million. According to CoStar Group and public data, the buyer was Pine Vista Apartment Homes LLC, an affiliate of The Apartment Co. of Encinitas. Alex Mogharebi and Otto Ozen of TMG represented the seller, Pacific Development Partners, LLC. Built on over seven acres in 1977 and partially renovated in 2015, the property is located at 800 E. Bobier Drive in Vista.
Focusing on wealth creation for the client regardless of the type of transaction that will accomplish it is the thrust of the Mogharebi Group, a newly formed joint venture between Alex Mogharebi and Cohen Financial. As GlobeSt.com recently reported, Mogharebi says “in other firms, the brokerage and lending sides of the business tend to arm-wrestle as to which one ‘wins the transaction’ with a client,” whereby his firm aims to “eliminate that conflict and let the market decide the best solution, whether selling or refinancing a property.” We spoke exclusively with Mogharebi and Cohen Financial’s president of capital markets Manny Brown about the new venture and why its premise makes sense.
“After being in the market for more than 30 years with sales in excess of $5 billion and more than 50,000 units sold, we wanted to create a platform that is conducive for the client to
make the best decision for wealth creation,” Mogharebi tells us. “This new platform is a venture between two very unique organizations that is all about focusing on the client. The team is composed of a group of experts that specialize in a segment of our business that allows us to simultaneously provide asset disposition, location of exchange properties, as well as capital structuring services to our clients. There are others in the marketplace that have all of the pieces that we have; however, the lack of organization, cooperation and correct compensation results in conflicts of interest which keep investors from getting the information necessary to make the best decision.”
Mogharebi says the new company is culturally and economically aligned with the client’s best interest and will allow them to make the right decision, based on real-time market feedback without any additional expense. “No guessing—no conflicts. Just optimum execution and results.” The platform of the Mogharebi Group is based on 30 years of deep market knowledge and relationship building. “These relationships were built by understanding the client’s needs, goals, and risk tolerance, which helps me partner with the client to achieve their goals,” says Mogharebi. “This platform offers our clients true advisory services versus a transaction-based approach.”
Brown tells GlobeSt.com that the new firm is a unique opportunity in the marketplace. “Alex has built a business on the investment-sales side and has had to depend on other parts of different companies to fulfill what he wanted to do. He didn’t have the control or the organization he needed. He has the relationships and understands the clients, and culturally we mesh so well. Before we start talking about transactions, we focus on what the client’s business plan is, what they are trying to achieve, and that helps us to understand the strategy we must take. Alex and his team are also focused that way. The way compensation flows through the venture is neutral; there’s no pressure from any one area to try and get it done a certain way because we make more money that way.”
Brown adds that at this point, both partners are focused on making this proposition work in this market. “If it works out and can be scaled, we will do it. But we’re not focused on that.” The same goes for similar joint ventures between Cohen Financial and other firms. “We don’t want to get ahead of ourselves. In the short run, this has been amazing with Alex and us. We’re excited about it, but we have a lot of work ahead of us. We’re focused on bringing a quality, comprehensive product that’s neutral to us and beneficial to the client.”
Alex Mogharebi, a commercial real estate broker, has opened The Mogharebi Group in Costa Mesa’s South Coast Metro area to provide multifamily investment sales and financing services.
“There is a tremendous market opportunity in commercial real estate to bring the sophistication and expertise of Wall Street to ‘Main Street’ investors and truly accelerate their wealth creation,” Mogharebi said in a statement. “We offer our clients long-term industry relationships in the multifamily sector, combined with a seasoned team of professionals who enjoy a virtually unmatched track record of success.”
Alex Mogharebi, one of the leading commercial real estate (CRE) brokers in the U.S., has opened own new firm.
The Mogharebi Group which opened this week, will offer a unique platform of multifamily investment sales, financing and advisory services, Mogharebi says.
“There is a tremendous market opportunity in commercial real estate to bring the sophistication and expertise of Wall Street to main street investors, and truly accelerate their wealth creation,” said Mogharebi (pronounced mor-AH-bee). “We offer our clients long-term industry relationships in the multifamily sector combined with a seasoned team of professionals who enjoy a virtually unmatched track record of success. My clients have ranged from high net worth individuals to the most sophisticated organizations in the multifamily field. My team knows how to deliver the ultimate client experience and we are excited to do so now under our own brand.”
According to Mogharebi, a key market differentiation for the new firm is its ability to provide investment sales and/or the right lending products to affect the correct strategy for the client and execute the transaction that maximizes the client’s returns. While some firms offer both capabilities, The Mogharebi Group has a unique approach to determining whether selling or refinancing a property ideally serves the client’s best interest: In the final analysis the market will determine the best option.
“In other CRE firms, the brokerage and lending sides of the business tend to arm-wrestle as to which one wins the transaction with a client,” said Mogharebi. “We want to eliminate that conflict and let the market decide the best solution, whether selling or refinancing a property. With no risk or cost to the client, we will initiate a side-by-side brokerage and-refinance process, weigh how the market responds, and then present our clients with their top options.”
To form a seamless process between sales and lending, The Mogharebi Group has created a joint venture with Cohen Financial and its parent company Pillar. Cohen Financial is one of the nation’s leading originators of commercial and multifamily real estate financing. Pillar is one of the nation’s leading direct lenders of multifamily real estate and one of the few lenders in the country that offer Fannie Mae, Freddie Mac and Federal Housing Administration HUD loans alongside traditional life insurance company portfolio, CMBS conduit, and bridge loans under one roof. Through this venture, The Mogharebi Group brings direct lending products, expertise, and a unique business model focused on serving the full spectrum of multifamily investors’ needs.
“Alex Mogharebi brings decades of experience in helping investors build wealth through commercial real estate. We are very excited to help him expand his reach by offering the full array of financing products and services,” said Manny Brown, president of Capital Markets at Cohen Financial. “In a business that’s all about ability to execute, Alex has distinguished himself and stands in a class by himself. His new firm will provide a combination of marketing, sales, financing and advisory services that will produce the best possible outcomes for clients to achieve their personal and business goals.”
Prior to forming the group, Mogharebi was ranked No. 1 nationwide for 17 years at Marcus & Millichap and Berkadia, closing in excess of 50,000 units with total sales approaching $5 billion.
Cohen Financial is a diversified, commercial real estate capital services firm offering debt and equity placement, loan administration and advisory services.
A new investment banking entity sailed into Newport Beach this week, and it’s sure to send ripple effects across the Southern California investment real estate waters. After more than 17 years as a top national broker, including stints at Marcus & Millichap and Berkadia, Alex Mogharebi has formed The Mogharebi Group, a multifamily investment sales, advisory and lending firm.
The Mogharebi Group claims it’s distinctive because, through its joint venture with Cohen Financial, it eliminates the normal conflict between teams, and allows the market to determine whether the best strategy is to refinance or sell.
“In other CRE firms, the brokerage and lending sides of the business tend to arm-wrestle as to which one ‘wins the transaction’ with a client,” said Mogharebi. “In the final analysis, the market will determine the best option.”
Alex Mogharebi, one of the leading commercial real estate (CRE) brokers in the U.S., opened his new firm, The Mogharebi Group, today to offer a revolutionary platform of multifamily investment sales, financing and advisory services.
“There is a tremendous market opportunity in commercial real estate to bring the sophistication and expertise of Wall Street to ‘Main Street’ investors, and truly accelerate their wealth creation,” said Mogharebi (pronounced “mor-AH-bee”). “We offer our clients long-term industry relationships in the multifamily sector combined with a seasoned team of professionals who enjoy a virtually unmatched track record of success. My clients have ranged from high net worth individuals to the most sophisticated organizations in the multifamily field. My team knows how to deliver the ultimate client experience and we are excited to do so now under our own brand.”
According to Mogharebi, a key market differentiator for the new firm is its ability to provide investment sales and/or the right lending products to effectuate the correct strategy for the client and execute the transaction that maximizes the client’s returns. While some firms offer both capabilities, The Mogharebi Group has a unique approach to determining whether selling or refinancing a property ideally serves the client’s best interest: In the final analysis the market will determine the best option.
“In other CRE firms, the brokerage and lending sides of the business tend to arm-wrestle as to which one ‘wins the transaction’ with a client,” said Mogharebi. “We want to eliminate that conflict and let the market decide the best solution, whether selling or refinancing a property. With no risk or cost to the client, we will initiate a side-by-side brokerage‑and-refinance process, weigh how the market responds, and then present our clients with their top options.”
To form a seamless process between sales and lending, The Mogharebi Group has created a joint venture with Cohen Financial and its parent company Pillar. Cohen Financial is one of the nation’s leading originators of commercial and multifamily real estate financing. Pillar is one of the nation’s leading direct lenders of multifamily real estate and one of the few lenders in the country that offer Fannie Mae, Freddie Mac and Federal Housing Administration HUD loans alongside traditional life insurance company portfolio, CMBS conduit, and bridge loans under one roof. Through this venture, The Mogharebi Group brings direct lending products, expertise, and a unique business model focused on serving the full spectrum of multifamily investors’ needs.
“Alex Mogharebi brings decades of experience in helping investors build wealth through commercial real estate. We are very excited to help him expand his reach by offering the full array of financing products and services,” said Manny Brown, President of Capital Markets at Cohen Financial. “In a business that’s all about ability to execute, Alex has distinguished himself and stands in a class by himself. His new firm will provide a combination of marketing, sales, financing and advisory services that will produce the best possible outcomes for clients to achieve their personal and business goals.”
About The Mogharebi Group
Founded by Alex Mogharebi, one of the leading commercial real estate brokers in the U.S. and a leading expert on the multifamily sector in Southern California. Prior to forming The Mogharebi Group, Alex was ranked No. 1 nationwide for 17 years at Marcus Millichap and Berkadia, closing in excess of 50,000 units and total sales approaching $5 billion. The Mogharebi team brings together a group of professionals with world-class expertise, aligned culturally and economically, to pursue the best interests of its investors. The team offers a one-of-a-kind approach to real estate investing, acting as a broker as well as delegated underwriter and loan servicer to offer direct‑lending options for its clients. To learn more about the firm, visit www.mogharebi.com.
About Cohen Financial
Cohen Financial is a diversified, commercial real estate capital services firm offering debt and equity placement, loan administration and advisory services. Cohen Financial is well recognized as one of the nation’s leading loan servicers and special servicers, as well as an originator of commercial and multifamily real estate financing. Known for finding innovative solutions to meet client needs, the company maintains an Equity Practice to help borrowers complete their capital needs and an enhanced Capital Advisory and Valuation Services to assist financial institutions and investors to better evaluate assets and investment opportunities.
Alex Mogharebi is the VP of investments with Marcus & Millichap’s Ontario, Calif., office. He joined the firm in 1989 and has since sold over 40,000 multi-family units totaling over $3 billion in sales. He is a member of the company’s Institutional Services Group and has been the number one Investment Associate nationwide 13 times.
CREF: How did you get into the real estate business?
AM: I was in mergers and acquisitions before I got into real estate. Real estate was a big part of the business and made up a significant portion of the transactions. When I got into real estate back in 1989, I saw a significant need to provide the same kind of professional services that were only accessible by large firms. I wanted to provide a similar type of advisory services to clients by bringing Wall Street to Main Street.
CREF: What notable deals have you been involved with?
AM: I successfully marketed and closed on a $142 million portfolio of eight properties with over 1,100 units in the Inland Empire. A sophisticated developer/builder client of ours had decided to dispose a portion of their portfolio. We marketed the portfolio just before the start of the holiday season and were able to generate high interest with over 40 offers in just a few weeks. Our challenge was to simultaneously manage and close all eight transactions with eight different buyers within a short window of time in order to accommodate our clients’ exchange goals. We ultimately closed the sales on all at a higher value than what our client initially expected.
CREF: In what commercial real estate industry do you specialize?
AM: I specialize in multi-family residential. Why? I’m a big believer in specialization. Real estate is a daily business and no single broker can be an expert in the different arenas of commercial real estate. By having in-depth knowledge of the product type as well as the market that we operate in, we can provide the type of information that allows apartment owners to make informed decisions.
CREF: How has the industry changed since you’ve been involved?
AM: I believe we have clearly moved from a transaction-oriented to a relationship-driven industry. I’ve assembled a team of experts that focus on a specific segment of the business to provide the high quality advisory services that nurtures and cultivates our relationships with clients.
CREF: How does the market look over the next 12 months?
AM: It looks like we will soon be in a recession. Residential construction is taking a hit not seen in decades and this has a significant multiplier effect on the rest of the economy. Job growth and incomes will be restrained which in turn will limit rent growth. The global liquidity crises and the ensuing tighter lending requirements have impacted pricing and resulted in an upward trend in capitalization rates for multi-family investments which is expected to continue well through 2008.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2008.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2007.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2006.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2005.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2004.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2003.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2002.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2001.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 2000.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1999.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1998.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1997.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1996.
Ten Inland Empire real estate brokerages participated in our inaugural survey for determining the Top Performers in six commercial real estate sales categories. Alex Mogharebi of Marcus and Millichap in Ontario topped the list for investment specialists, posting $81.2 million in sales on 32 transactions. Mogharebi also topped the list for total sales dollar volume in 1995. Mark McAdams of Cushman & Wakefield in Ontario also appears at the top of two lists, office landlord representation and combined office representation. We had to add the latter category to our original list since some representatives had difficulty segregating their sales in retrospect. The consensus among the list toppers is that the commercial real estate market should be firming up this year and recovering well in 1997. Our thanks to those offices that participated, and our congratulations to the Inland Empire Business Journal Top Performers in commercial real estate sales for 1995!
Alex Mogharebi has a well-deserved reputation as an agent who can move investment properties, especially apartment complexes. Unfortunately, Mogharebi didn’t reach his goal of $100 million in sales, but he tops the list as investment representative – and the list for overall dollar sales volume as well-based on 32 transactions.
His keys for success are simple and succinct: “Keep a promise, undersell and over deliver.” Mogharebi said that means: do what you say you’re going to do; let clients make the decisions; but give them more information and representation than they expect so that they can make a well-informed decision. Mogharebi has been active in real estate since 1978 and became involved with investment property sales in July, 1989, when he moved to a desk at Marcus & Millichap. He works 11 hour days Monday through Friday, and puts in two Saturdays per month. Leisure hours are often spent with family playing tennis.
“We are emerging from the past three years of an REO-foreclosure-market into a more stabilized market,” Mogharebi said about the direction of his specialty. He said vacancy factors are coming down, and he expects the market to be flat for the next year or two. “After that,” he said, “we should see increasing values in investment properties.”
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1995.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1994.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1993.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1992.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1991.
Wall Street Journal named Alex Mogharebi as the Top Investment Broker of Marcus & Millichap’s Ontario, CA office in 1990.