LA’s top 5 multifamily investment sales of 2020 fell 50%

Buyers hunted for deals but sellers weren’t willing to drop prices, said Savills’ Michael Soto

300 S. Santa Fe Ave. (Google Maps)
300 S. Santa Fe Ave. (Google Maps)

It’s no surprise that Los Angeles County multifamily investment sales plunged in 2020, but the amount is eye-popping.

The top five sales totaled $646.1 million, down more than 50 percent from the $1.4 billion in transactions last year.

The priciest apartment deal in L.A. County from January through Dec. 4 — a Canadian public employee pension fund snapped up a trendy Arts District building — would not have cracked The Real Deal’s top five list last year.

The percentage change was nearly identical in the broader L.A. market. As of Dec. 10, the greater L.A. metro area recorded $6.1 billion in multifamily sales this year, according to Real Capital Analytics. That’s a 53 percent dip from the $13.2 billion tally in 2019.

“It is a big drop,” said Michael Soto, research director at Savills. He attributed the dropoff in large part to property owners, who wouldn’t negotiate on dollar-amounts.

“Buyers are looking for deals and sellers aren’t willing to drop their asking prices,” he said.

TRD’s list of priciest multifamily trades in L.A. for 2020 is based on property records and market reports.

1. One Santa Fe, Arts District – PSP Investment Board | $176M

Public Sector Pension Investment Board, a money manager for the Canadian Crown Corporation, purchased the 438-unit building at 300 South Santa Fe Avenue in March. JLL advised on the transaction.

Berkeley Property Advisers, a Boston-based multifamily property owner, and Hearthstone Housing Foundation of Newport Beach completed construction of the complex in 2015.

Located across from SCI-Arc Institute of Architecture, adjoining a Cafe Gratitude — where patrons state what they are thankful for before ordering — One Santa Fe was a harbinger for a gentrifying Arts District.

PSP Investment Board closed on the purchase on March 20, just as the pandemic took hold in California.

2. Wilshire Vermont, Koreatown – DivcoWest, Klein Financial Corp. | $135M

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Perhaps highlighting the dearth of large deals this year, the second biggest multifamily transaction was actually a recapitalization of this 449-unit building.

Owner Klein Financial Corporation took on a new investment partner in San Francisco-based DivcoWest for the property at 3183 Wilshire Boulevard. Its former partners on the property had been Hearthstone Housing Foundation and the California Public Employees Retirement System.

The deal closed in May. The Los Angeles Business Journal first reported on the transaction.

3. Wakaba, DTLA – JPMorgan Chase | $116M

The latest in a series of multifamily deals for Irvine-based Saris Regis. The company sold the 240-unit Wakaba building in Little Tokyo four years after completing construction.

The building at 232 East 2nd Street is on a busy commercial stretch, and the deal includes 16,000 square feet of commercial space, plus 470 parking units. JLL advised on the transaction, which was completed in February.

4. Hollywood, Glendale – Raintree Partners | $112M

Raintree Partners’ 551-unit purchase involved multiple properties in Hollywood, Glendale, Camarillo, and the San Fernando Valley. Raintree acquired the portfolio from Jeffrey and Harry Root of Precision Property Management.

The deal was completed in November. CBRE brokered the sale.

5. Redondo Beach – Coastline Real Estate Advisors | $108M

El Segundo-based Coastline Real Estate Advisors picked up 16 different properties and 240 units in the deal. The seller was Myrna Frame, who Multi-Housing News said “owned the assets for more than 20 years.”

Matthews Real Estate Investment Services, an El Segundo-based brokerage, advised on the deal.