The Garfield Apartments, a 24-unit complex at 1722 Garfield Place in Hollywood, sold last month for $5.45 million with a cap rate of 3.8 percent, The Real Deal has learned. The buyer, Arts District-based Engine Real Estate, helmed by Jeffrey Birkmeyer and David Walker, plans to reconfigure the apartments in the 1920s era building.
The sellers — Kumar Koneru and Positive Investments Inc., according to CoStar — renovated about half of the units. In addition to nine studios, the old configuration included 11 one-bedroom and four two-bedroom units. The new configuration will result in 15 one-bedroom and nine two-bedroom, units.
Engine expects to increase rental income by about 75 percent once all the renovations are complete and the apartments turn over.
The Hollywood residential submarket saw vacancy levels at 3.7 percent in the fourth quarter and rents that increased by 5.4 percent on a year-over-year basis, according to Lee & Associates.
Warren Berzack and Stephen Geiger of Lee & Associates represented the buyer and the seller in the transaction.
One of the many developments underway nearby is an apartment complex across from Garfield Apartments on Hollywood Boulevard. The developer, Astani Enterprises, is constructing a $100 million mixed-use complex on the site of the former Falcon Studios.
“Rental rates throughout Los Angeles have been rising for several years now, and the new construction underway in Hollywood will raise the rate ceiling for all apartment owners,” Berzack said.