Friday, January 6, 2017

IEC Acquires Rare Multifamily Asset in Glendale, CA for $54.2 Million

Towne at Glendale Apartments, 1717 North Verdugo Road, Glendale, CA

Glendale, CA – Institutional fund manager Interstate Equities Corporation (IEC) has acquired a 126-unit multifamily property in Glendale, California for $54.2 million. This is the seventh acquisition to date within the firm’s IEC Institutional Fund III, L.P., a fully discretionary, $200 million commingled fund targeting value-add multifamily investments throughout coastal California.

“It is rare to find an asset of this quality, vintage and size in what we feel is one of the most attractive markets on the west coast,” says Brendan Gibney, an acquisitions professional at IEC.

Adrienne Barr
Towne at Glendale is located at 1717 N. Verdugo Road in Glendale, California.  Adrienne Barr and Shane Shafer at Hendricks Berkadia brokered the transaction. The acquisition loan was arranged by Peter Smyslowski at Holliday Fenoglio Fowler, L.P (HFF) and provided by CIT Bank, N.A.

The apartment community was built in 1965 and renovated in 2007 to condo specifications, featuring high-end finishes, central air conditioning and amenities that are characteristic of institutional-quality assets.  Currently known as Verdugo Village, IEC will rebrand and rename the property Towne at Glendale.

            “The property’s unique configuration of two and three-bedroom units, prime location in a durable submarket made this a strong acquisition that fits squarely into IEC’s investment strategy,” Gibney says.

            Gibney notes that Glendale, one of the tri-city submarkets of Los Angeles County’s San Fernando Valley, is poised for economic growth, boasting strong school districts, top employers, new residential developments and premier retail amenities including the Americana at Brand.

            “As a firm, we have been investing in Glendale for several decades and are selectively looking to expand our presence in this region,” Gibney explains. “This acquisition is well-aligned with our strategy of targeting apartment communities that are located in growing and resilient markets of California.”

Peter Casey, a Director at IEC, adds that the strength of the market and the asset’s long-term growth potential generated strong competition for this acquisition.

Brendan Gibney
“There were many bids for this asset,” says Casey. “As one of the few funds competing for this deal, we were able to differentiate ourselves through our surety of close and access to fully discretionary capital.  

"Based on our proven track record and expertise in the Glendale market, we emerged as the right buyer in this transaction and moved quickly to complete due diligence in 15 days.”

            Casey explains that while IEC’s acquisition pipeline is strong, the company has been a net seller in 2016, selling five units for every one purchased this year.

“While we continue to seek opportunities to expand our multifamily portfolio, we are also being increasingly selective in the investments we pursue,” says Casey, who notes that IEC typically closes on less than two percent of the deals it underwrites.  “As net sellers, we view the increased competition in the current investment market as an advantage that provides us with greater liquidity and a sound exit strategy.  Further, as selective buyers, we are able to better position ourselves to focus on opportunities that fit squarely into the historical acquisition parameters that have created the track record.”

The Towne at Glendale is currently 96 percent occupied, and will undergo a series of capital improvements to enhance and expand its existing amenities.  Planned renovations include a major redevelopment of the main lobby and entrance, the installation of a new fitness center, upgrades to the existing onsite movie theater, as well as the addition of onsite storage for residents.

“Through management improvements and strategic renovations, we plan to increase operational efficiencies and ultimately improve the overall resident experience at the property,” confirms Gibney.

For a complete copy of the company’s news release, please contact:

Katie Kea or Jenn Quader
Brower, Miller & Cole
(949) 955-7940

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