Waterford Property Company paid $120 million for an apartment complex in Long Beach, and because it utilized state financing, will convert the luxury complex into middle-income housing.
Waterford received tax-exempt bonds from the California Statewide Communities Development Authority to buy the Oceanaire at 150 W. Ocean Boulevard, according to Commercial Observer. In exchange, Waterford will lower rents for households with incomes between 80 percent and 120 percent of area median income. The Oceanaire has 216 units.
The seller was a subsidiary of multifamily giant Lennar, which also developed Oceanaire. The units are currently priced on the upper end of the market.
The state’s financing deal is part of a workforce housing finance program that the Communities Development Authority created last year to address the state’s so-called “missing middle” housing issue. Government bonds and other subsidies and programs help finance low-income housing, but middle-income tenants don’t qualify for most of those programs.
Area median income in L.A. County is currently set at $70,300 for a four-person household. Households earning between $61,840 and $92,760 would qualify for Oceanaire.
The state program also bars Waterford and other companies from displacing any existing tenants, and it caps annual rent increases at no more than 4 percent.
It’s Waterford’s second play in Long Beach this month. The company was among three investors that took over the beleaguered City Place Long Beach shopping center, after the mall’s previous owner defaulted on a mortgage.
Waterford also develops market-rate properties. In November, the firm filed plans for its largest ground-up project to date — a 644-unit complex in Santa Ana, estimated to cost $225 million.
[CO] — Dennis Lynch