A Los Angeles investment firm has scooped up a newly constructed Warner Center apartment complex for $163 million, one of the largest deals for an L.A. County rental community in recent years.
The purchase of the Millennium Woodland Hills underscores heavy investor appetite for apartments amid a falling homeownership rate, as well as growing interest in the increasingly popular neighborhood.
"Warner Center has become this concentrated area for younger people and workers," said Robert Hart, chief executive of TruAmerica Multifamily, who along with a partner, acquired the luxury community late last month. "People want to be centered around there."
Rents for a one bedroom at the Erwin Street and De Soto Avenue complex start at $2,064, a price that comes with amenities such as two swimming pools, a dog park, a 24-hour clubhouse and community garden.
Average rents in Woodland Hills have risen 8.2% over the last year to $1,982, according to commercial real estate brokerage Marcus & Millichap.
Further rent growth in job-rich Warner Center, which includes parts of Woodland Hills and Canoga Park, is likely, Hart said.
The area has long been a hub for office space in the San Fernando Valley, but now developers are building more residential projects under a neighborhood zoning plan adopted in 2013 that allows for more housing.
Westfield Corp. opened a large open-air mall in September along Topanga Canyon Boulevard serving the area.
Hart said the 395-unit complex, which opened in March, is now essentially full at 95% occupancy. Tenants had leased about 45 to 50 units a month, according to CBRE Group Inc., which arranged $103.1 million in financing for the deal.
"This extremely quick lease-up symbolizes the strong demand in the area," said Brian Eisendrath, a vice chairman with CBRE.
The sale is one of the 10 largest for an L.A.-area apartment complex in the last five years, according to real estate data provider CoStar Group Inc., though it doesn't rank that high on the basis of its per-unit price of about $413,000. It also is the second biggest yet for TruAmerica, topped only by its $283-million purchase in 2014 of a high-rise complex in Koreatown.
The company has grown rapidly since it was founded by Hart and New York-based Guardian Life Insurance Co. of America as a joint venture in 2013. It now manages a $5 billion-portfolio consisting of more than 25,000 units in California, Washington, Oregon, Colorado, Arizona, Nevada and Utah.
In the Warner Center deal, TruAmerica partnered with Intercontinental Real Estate Corp., a Massachusetts real estate investment manager, to purchase the complex from the Dinerstein Cos. of Houston.
Hart said TruAmerica is rebranding the Warner Center complex as the Motif, but is not undertaking major renovations.