BRE Properties, Inc. (NSYE: BRE) has acquired the 270-unit Jefferson at Hollywood multifamily community for $120.5 million, or about $446,000 per unit, from Long Wharf Real Estate Partners LLC.
The seven-story, 238,441-square-foot apartment building was constructed in 2010 on two acres in the Hollywood submarket of Los Angeles. The community is within walking distance of top restaurants, retailers, theaters and entertainment. The mix of 8 lofts, 156 one-bedroom, and 106 two-bedroom units were 94 percent leased at time of sale, with asking rents between $2,559 and $3,350 per month.
According to a release, the sale closed at a discount to replacement cost and is expected to generate a first-year (pro forma) CAP rate of 4%.
The property traded unencumbered by debt, financed in part with proceeds from the buyer's revolving credit facility. In conjunction with the sale, the buyer, a leading owner, operator and developer of apartment communities in targeted growth markets across the state, will dispose of several slower-growth, non-core communities through a reverse like-kind exchange expected to be completed by the first quarter of 2014.
"This transaction is a component of our strategy to improve [BRE's] portfolio quality by disposing of non-core communities and recycling capital into our high-barrier, in-fill development pipeline as well as select acquisitions such as Jefferson at Hollywood," commented Constance B. Moore, president and chief executive officer.
Marc Renard with Cushman & Wakefield, Inc. represented the seller, who was reportedly able to capitalize on current market conditions in the resurgent Hollywood submarket.
Please see CoStar COMPS #2850857 for additional information on this transaction.