An investment firm secured a $65 million loan for its hefty purchase of and plans to reposition an apartment property in Los Angeles' Miracle Mile.
Mesa West Capital, based in Newport Beach, California, said it provided developer Sares Regis Group with $65 million in financing for The Preston, a 169-unit apartment complex at 630 Masselin Ave. in one of L.A.'s pricier suburbs. Sares paid $86.7 million, or $516,523 per unit, to buy the property from the Chicago-based firm real estate firm Heitman in January, according to CoStar data.
The Preston sits in Los Angeles’ Mid-Wilshire market, where the average apartment property trades for $414,000 per unit, according to CoStar data. The Mid-Wilshire area fetches some of the city’s highest rents — around $2,427 per square foot, compared to the metro average of $1,957 per square foot. That alone could have motivated Sares Regis Group to pay an above-average price for the property.
The Mid-Wilshire area is one of Los Angeles’ glitziest areas. It sits within the city’s central core and is home to the Miracle Mile neighborhood, which fetches some of the city’s highest rents and houses a number of museums and cultural institutions.
The Preston offers one-, two- and three-bedroom units. The property includes a 336-car parking garage with an electric vehicle charging station, a dog park, pool, fitness center and a clubhouse. It is 91.1% occupied, according to CoStar data. The average apartment in the Mid-Wilshire area is 95.8% occupied, according to CoStar data.
“Strong underlying fundamentals make Mid-Wilshire a popular target for institutional capital, despite cap rates that have held around 4% for several consecutive years,” Ryan Patap, director of CoStar Market Analytics, wrote in his most recent report on the Mid-Wilshire’s multifamily market.