Friday, March 29, 2013

Mini-Case Study #1: 581 N Windsor Boulevard 90004 - Sale of a Pristine, Upgraded Fourplex with Market Rents near Larchmont Village

A classic Fourplex in the classy Larchmont neighborhood
Most of Adner Realty Group's business is selling multifamily properties in Los Angeles.  We are proud to be a Commercial Director at Keller Williams Hollywood Hills, and thought we share some of our sales to illustrate trends in the Los Angeles apartment building market.

Adner Realty Group listed this fourplex in Larchmont, 581 N Windsor Boulevard 9004, in February 2012, just as the apartment building market was emerging from four years in the doldrums, with a sale price of $1,375,000.

The building was fully upgraded by its current owners with four new kitchens, all new electrical panels, wiring and fixtures, seismic retrofitting, and numerous other upgrades.

The four one bedroom, one bathroom units each measured over 1,000 sq ft and looked pristine with hardwood floors and fresh paint.  (The property has 4,116 sq ft of living area, a 5,097 sq ft lot, three garage spaces and one storage shed.)

The rents were all near market rate, and averaged $1,936 per unit, or $1.88/sq ft/month.

What Tenants Seek: Large, light, bright units with Hardwood Floors

The building was in contract in 67 days, and ultimately closed in May 2012 for $1,325,000 with no concessions.

581 N Windsor Boulevard sold at a 14.3 GRM and a 5.6% cap rate.

A few takeaways from this sale are:
  1. Location, location, location - this building attracted a lot of interest because of its "sweet" location near Larchmont Village; 
  2. superiorly maintained building with great curb appeal will net a superior price
  3. Investors gravitated to the building because it was "turnkey" with upgraded systems, no deferred maintenance and market rents
  4. Lack of similar properties in this desirable area intensified buyer interest.
In the ten months since this sale, the market has strengthened considerably.  If put on the market today, we're pretty sure it would sell in fewer than 67 days.

Thinking of buying or selling an apartment building?
Have a question about the multifamily market?
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