The new owner of a waterfront apartment complex in one of Southern California's most affluent coastal communities is betting that it can turn unused space into fresh revenue.
Whittier Trust purchased Villa del Mar, a 198-unit luxury apartment complex on 5 acres with 1,500 linear feet of marina frontage at 13999 Marquesas Way in Marina del Rey, from Irvine, California-based development firm Far West Management, for $62 million, or $313,131 per unit, according to CoStar data.
“This was a rare opportunity to acquire a flagship coastal asset with inherent scarcity, stable cash flow and numerous value-creation avenues,” said a statement from Colliers Vice Chair Kitty Wallace, who represented both buyer and seller in the deal.
The Pasadena-based private investment firm plans to boost the property’s income by putting unused boat slips to work, turning extra parking into apartments, and adding high-demand perks like pickleball courts or a waterfront clubhouse with paddleboard, kayak and bike rentals.
The seller and developer of the complex owned it for decades and recently spent $27 million upgrading the interiors and common areas.
The purchase comes with hurdles. Villa del Mar’s ground lease has 35 years left, which can affect financing and long-term planning, and the property is subject to annual rent caps per state law. The new owner must also complete $6.68 million in marina infrastructure repairs by 2029 to keep the property’s docks compliant and fully operational.
The sale contributes to a 31% year-over-year increase in total multifamily sales across Los Angeles, according to CoStar data. The greater Los Angeles multifamily vacancy rate is hovering at 5%, and the number of new units under construction is down by 19% in the past year.
Investment appeal
Marina del Rey, roughly 15 miles from downtown Los Angeles, is home to the largest small-craft harbor in North America, with capacity for 4,600 boats.
Villa del Mar is in a prime section of the Marina surrounded by high incomes, low retail vacancy and strong rental growth, CoStar data indicates. The property is minutes from Silicon Beach employers such as Google, Apple, Amazon Studios and YouTube.
Villa del Mar offers one- and two-bedroom apartments with private balconies or patios and includes a five-story parking structure with 645 parking spaces. The property is 5% vacant, with an average asking rent of $4,500 per month, according to CoStar data.
One of the most significant value-add opportunities for the new owners is the option to convert up to 128 covered parking stalls into 47 accessory dwelling units, many with marina views, potentially adding more than $850,000 in net operating income annually, Wallace said.
Its 209 boat slips — some stretching up to 130 feet — are 99% occupied and can accommodate some of the largest private vessels in the Marina, a rarity that adds both revenue and cachet. Former residents have included late-night host Johnny Carson, who once kept his yacht there.