Investment firm Advanced Real Estate Services acquired a recently-built 346-unit apartment complex in Chino Hills, one of the largest deals that closed in the area during the pandemic.
Also known as ARES, the Irvine-based firm paid $130 million for The Crossings, located at 15101 Fairfield Ranch Road, according to Commercial Observer. The seller, Bridge Investment, completed the development last year.
The sale was a 1031 exchange, which was made with funds from the sale of a “large mobile home park in Huntington Beach,” ARES’ president Richard Julian said, according to the Observer.
Fannie Mae provided a $76.8 million acquisition loan that carries a 2.44 percent interest rate and 10 years of interest-only payments.
A 1031 exchange allows the investor to swap two properties and defer the federal capital gains tax incurred on the first sale.
Democratic presidential nominee Joe Biden wants to eliminate the tax loophole that enables such exchanges for investors with annual incomes greater than $400,000.
Amenities at the Crossings property — which spans 32 acres — include a gym, soccer field, playground, pool, and a business center. There also are electric vehicle charging stations.
ARES plans to acquire two more multifamily properties by the end of the year with 1031 exchange funds, according to the report.
ARES owns around 9,000 apartment units in Southern California. Julian said the firm was “bullish” on the western Inland Empire multifamily market, the Observer reported. [CO] — Dennis Lynch