UPDATED, 8:35 a.m., Oct. 28: West Hollywood-based company 4D Development is the latest real estate firm zeroing in on the San Fernando Valley, buying an 85-unit apartment complex in Northridge for $21.25 million, or about $225 per square foot.
The seller was San Francisco-based investment firm Prime Residential, which bought the property for $14.58 million in 2007, according to CoStar.
The six-structure complex, known as Woodley Plaza, is located at 10139 Woodley Avenue and was built in 1971. Under Prime’s ownership, six of the 85 units were renovated up to modern standards, according to broker Kevin Green of Institutional Property Advisors, a division of Marcus & Millichap. The sale price pencils out to $250,000 per unit.
Green and his colleagues Greg Harris and Joseph Grabiec represented both the buyer and the seller in the transaction.
4D is planning to extend the renovations to the rest of the complex,as well as make minor updates to the amenities, which include a pool and fitness center, Green told The Real Deal.
At the time of closing, the one- and two-bedroom units in Woodley Plaza were averaging $1,565 in monthly rent. The projected post-renovation average rate is $1,950, he said.
4D is financing the deal through a portfolio loan from First Foundation Bank.
The Valley submarket saw a 13 percent increase in sales volume over the past year, according to a recent Marcus & Millichap report. The average price per unit also increased to about $230,000 — a 2.6 percent hike over the last four quarters.
Earlier this month, pension fund TIAA bought a 348-unit apartment complex in Chatsworth for $72.5 million, or about $208,000 per unit, TRD reported.
“It’s a pretty dense area, not a lot of available land, not a lot of opportunities to develop ground up,” Green said. But investors are gravitating to the Valley to buy older assets as value-add opportunities, he added in an email statement.
“The limited development opportunities are driving capital to renovation projects like Woodley Plaza,” he said.
Clarification: Green’s last quote was revised to better reflect submarket trends.