Last month Dornin Investment Group (“DIG”) completed the sale of three Southern California multifamily investments comprised of two properties and one performing note, closing at approximately $33.5MM. The two properties are located in Lompoc and Los Angeles, and the note was secured by a property in Lancaster. All were sold to private investors. Purchased separately between 2012 and early 2013, the investments have a combined 257 units.
Seabreeze Apartments is located in Lompoc in Santa Barbara County and consists of 64 units built in 2011. The property is highlighted by spacious courtyards and walkways accented with trees and new landscaping. The asset sold for $10.3MM and required a Fannie Mae loan assumption originated and serviced by Berkeley Point Capital (“BPC”). “The team at BPC is first rate and they made what is normally a very difficult and long process with loan assumptions fast, painless, and completed in just 45 days. One of the major reasons we financed this property with Berkeley when we acquired it is because they service the loans and provide exceptional customer service” said Chris Dornin, President and Founder of Dornin Investment Group. DIG was represented by Steve Brown, Austin Herlihy, and Chris Parker of Radius Group Commercial Real Estate out of Santa Barbara.
Kelsey Residences is a Class A apartment project built in 2012 that was originally intended to be sold as condominiums. DIG acquired the vacant property from the developer at CofO, financed it with a loan from a national balance sheet lender, and leased it up in less than 3 months while subsequently refinancing out a significant portion of its equity. Located just north of the 10 Freeway near USC, the 41-unit luxury, condo-style apartment community consists of fifteen (15) one-bedroom/one-bath units, fourteen (14) two-bedroom/two-bath units, and twelve (12) three-bedroom/two-bathroom units ranging from 709 square feet to 1,371 square feet. The asset sold for $13.1MM. Since acquiring the property and leasing up the units, the property has enjoyed nearly 100% occupancy and steady rental growth on renewals. “This was a unique opportunity to acquire a brand new class A value add property in a market that was experiencing less than 2% vacancy” said Dornin. “Given we completed our business plan so quickly and the demand for multifamily in LA was driving cap rates so low it made sense for us to exit.” Brent Sprenkle with Berkadia Real Estate Advisors represented DIG in the transaction.
In 2013 DIG acquired the approximate $10.5MM note secured by a first trust deed on a 152 unit complex in less than one week from a regional bank. Located in Lancaster, a core city of the Antelope Valley, the property was built in 1986 and consists of 20 two-story buildings. The note was acquired at a significant discount and yielded high single digit returns during the past two years. Originally when it was acquired, the underlying collateral was experiencing significant vacancy and deferred maintenance. However, as the market recovered over the past two years, the borrower was able to complete the necessary repairs to stabilize the property’s occupancy. The note was sold off at nearly the full balance to a high net-worth private investor who was looking for stable low risk yield.
About Dornin Investment Group
Dornin Investment Group is a real estate investment and asset management firm that invests in commercial and residential real estate in partnership with a broad base of institutional and private investors. The firm specializes in distressed, opportunistic, and value-add real estate investments in all major property types with a focus on office, flex, industrial, multifamily and hospitality properties. The company offers a full service investment platform providing property management, leasing, construction management and finance through its wholly owned affiliate Dornin Realty Advisors (“DRA”). For more information, visit www.dorningroup.com.