The Real Deal Los Angeles

Lion Real Estate buys 112-unit apartment complex in Tarzana for $19M

Developer cites the Valley's strong rent growth as reason to buy

June 09, 2016 12:00PM
By Cathaleen Chen

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Jeff Weller and 5919 Reseda Boulevard (credit: Lion Real Estate)

Jeff Weller and 5919 Reseda Boulevard (credit: Lion Real Estate)

Lion Real Estate just acquired two apartment buildings in Tarzana for $18.8 million.

The 65,040-square-foot complex at 5919 and 5939 Reseda Boulevard has a total of 112 units. Finished in 1970, the apartments include studios as well as one- and two-bedroom units.

The developers have plans to renovate both the interior and the exterior of the complex, Lion co-owner Jeff Weller told The Real Deal.

The building is 95 percent occupied. The new owners will also add more amenities, including a gym and a park-like setting behind the structures.

The goal is to attract young professionals, Weller said.

Lion owns flashier projects in hip areas, like the Hyperloop building in the Arts District as well as a handful of multi-family residences in Downtown and the Eastside, but looks to the Valley for steady cashflow.  Weller said Lion was drawn to the Tarzana apartments because of the submarket’s sustained growth and its proximity to the 101 and the 205.

“[The Valley] is a core area close to freeway access, and rent growth has been fantastic. We believe it’ll continue to be strong because of the lack of supply in more insular parts of L.A.,” he said. “Our goal here is to build a portfolio that we can sustain over time and create great cash flow for our investors, as well as continuing to buy in Koreatown, Echo Park, Silver Lake and DTLA.”

Lion plans to keep the property for 15 years.

“We’d like to get up to a couple thousand units in the Valley in the next few years,” Weller said. Lion currently owns a residential building — Park Terrace — just one mile north of its latest acquisition, as well as another one called Laurel Terrace in Valley Village.

In addition to the Valley, the company is particularly interested in City West.

“We think that area of the city is going to be the next Echo Park,” Weller said.

Last month, Lion sold two Arts District warehouses at 2014-2020 and 2028 East 7th Street for $14.9 million, or three times what it paid for them just three years ago.