Westlake apartment portfolio sells a year after tenants battled landlord over rent hike

Tenants had refused to pay rent after a $250 a month increase; the new owner may renovate units and double that increase

TRD LOS ANGELES /
Oct.October 04, 2019 10:00 AM
29th Street Capital founder Stan Beraznik, Jason de Guzman, the firm’s senior vice president for acquisitions for L.A., and the three buildings at 131, 143, and 171 S. Burlington Avenue
29th Street Capital founder Stan Beraznik, Jason de Guzman, the firm’s senior vice president for acquisitions for L.A., and the three buildings at 131, 143, and 171 S. Burlington Avenue

Last year, more than 80 tenants at three neighboring Westlake apartment buildings refused to pay rent after the landlord announced sharp monthly hikes.

The strike eventually ended and a year later, the complex has sold as a portfolio. The sale price was $48.3 million for all 192 units. They are located at 131, 143, and 171 S. Burlington Avenue.

The buyer is Chicago-based 29th Street Capital, according to Curbed. The company plans to renovate the properties, told tenants they need to vacate while that happens and may raise rents as much as $600 a month, according to the report.

Two executives at the company, Stan Beraznik and Jason de Guzman did not immediately return requests for comment.

The seller is a trust linked to Valley Village attorney Lisa Suzanne Ehrlich-Cupack, who has owned the portfolio since 1994, property records show. Transwestern Commercial Services agents Josh Kaplan and John Swartz represented the seller.

Last spring, tenants in at least 85 of the units began withholding rent after the landlord raised it $250 a month. The group, calling itself Burlington Unidos, ended the strike some time before the fall, and in November, the management company started eviction proceedings for 16 tenants who had participated.

The L.A. Tenants Union helped organize the strike and has organized others in the city. The LATU did not return requests for comment on the sale.

Some lawsuits related to the evictions are ongoing. Some tenants told Curbed that they had not been formally notified of the property sale, but all tenants at one of the buildings were informed on Tuesday that they had 30-60 days to move out of their units to allow for renovations. After that, they could return, they were told.

The notices also said there would be rent hikes that appear to exceed the increases that prompted the rent strike. A one-bedroom tenant said he was told his rent would increase from $1,300 to 1,900 following the remodel.

All three were built in the late 1980s and in January, could be subject to a statewide rent cap under Assembly Bill 1482 if Gov. Gavin Newsom signs the bill into law.

The bill’s annual rent cap — 5 percent plus inflation — would apply to all units older than 15 years unless they undergo a significant renovation. The bill also requires landlords to compensate evicted tenants for relocations unless they can meet certain criteria, such as proof of non-payment of rent.

Because the measure wouldn’t take effect until January 1, 2020, some sources told The Real Deal that they expect a flurry of sales and evictions through the end of the year as investors shed 1482-eligible properties and look to maximize rents before the cap kicks in.

Some industry pros worry the measure will diminish investor interest in multifamily properties across the state, but others expect it to have little impact on activity.

Referencing AB-1482, Kaplan said in a statement that the portfolio deal “shows that despite the concern over rent control legislation, there is still very high investment demand for multifamily properties” in the Westlake area.


Related Articles

arrow_forward_ios
8940 N Reseda Boulevard (Credit: Google Maps)

Developers eye Northridge site for 51-unit apartment complex

Developers eye Northridge site for 51-unit apartment complex
Mike Bonin

LA punts on apartment vacancy tax ballot measure

LA punts on apartment vacancy tax ballot measure
Nury Martinez

LA approves biggest rent relief program of any city in US. Is it enough?

LA approves biggest rent relief program of any city in US. Is it enough?
Councilmember Mike Bonin (Credit: Joe Scarnici/Getty Images)

Another gut-punch: LA City Council mulls apartment vacancy tax ballot measure

Another gut-punch: LA City Council mulls apartment vacancy tax ballot measure
Tani Cantil-Sakauye, Chief Justice of California

California judges postpone decision on resuming evictions and foreclosures

California judges postpone decision on resuming evictions and foreclosures
Rents are declining in L.A. County (Credit: iStock)

Coronavirus pushes down rents in LA County

Coronavirus pushes down rents in LA County
Nury Martinez, City Hall (Credit: Twitter, iStock)

City of LA’s $100M rental subsidy program would be boon to multifamily landlords

City of LA’s $100M rental subsidy program would be boon to multifamily landlords
Hilda Solis

Landlord-tenant lifeline: LA County may buy affordable properties facing foreclosure

Landlord-tenant lifeline: LA County may buy affordable properties facing foreclosure
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...