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The Village at Toluca Lake Apts. Sells for $59 Million

Off-Market Deal Reflects Continued Heat of Burbank, San Fernando Valley Multifamily Submarkets
December 22, 2017
San Mateo, CA-based Essex Property Trust Inc. (NYSE: ESS) purchased the 146-unit Village at Toluca Lake from Burbank-based Cusumano Real Estate Group for $59 million, or $406,896 per unit, in an off-market transaction.

The two-building property at 211 and 235 N. Valley St. on the cusp of Burbank and Toluca Lake is only five minutes away from Hollywood, Universal Studios and Warner Brothers Studios, according to Michael Koshet, KW Commercial off market multifamily specialist, who represented both the buyer and seller.

"Being right on the 134 Freeway, the exposure that asset receives every day is incredible," Koshet said, adding the property benefits from being near both the Toluca Lake and Burbank markets.

Cusumano Real Estate Group also put a lot of money into the 110,566-square-foot property over the past seven years before choosing to sell.

"They invested a good amount of capital and I guess they felt it was a good time to sell if they got the right price,” Koshet said.

Essex Property Trust also owns 416 on Broadway and The Hamptons in nearby Glendale and Muse in North Hollywood, according to the company’s website. However, Essex previously owned no properties in between those markets.

The deal was also attractive given the fact there was no bidding process and the 43-year-old property was deliverable, according to Koshet.

Apartments in Burbank have traded at higher prices than the Los Angeles metro average, but that gap has widened significantly of late as pricing in the market has been accelerating, according to CoStar data.

The median price, roughly $300,000 per unit as of mid-year 2017, is about 25% higher than the Los Angeles median, which is an historical high for the area, according to CoStar data.

Bryan Shaffer, George Smith Partners principal, said multifamily has been among the leading product types since the most recent downturn. Shaffer has seen an increasing number of investors eyeing the San Fernando Valley.

"Over the last year, as markets like downtown Los Angeles have exploded, investors have increasingly targeted stable markets in the Valley, a very stable suburb of Los Angeles," Shaffer said. "It's not that they are looking for projects in the suburbs, but that area in the Valley is considered part of metro L.A., and the populations are equal to other major markets around the country."

Cusumano Real Estate Group may have unloaded one property in Burbank, but the firm is building another. Construction is under way on the company’s 241-unit Talaria at Burbank, which broke ground in October 2015.

The project located at 3401 W. Olive Ave. will also bring the first Whole Foods to the area. It is scheduled to be completed in 2018.
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