O.C. Apartment Complex Brings Record $198.6 Million
A Bay Area real estate company acquired the Resorts, a huge apartment and townhome complex in Aliso Viejo, for $198.6 million, the highest price analysts could recall for an Orange County residential property.
Gerson Bakar & Associates of San Francisco said Wednesday that it bought the three-building, 1,609-unit apartment and townhome project from a fund managed by AEW Capital Management, a Boston real estate advisory firm.
The price, which averages $123,000 per unit, is the highest for any complex sold in Orange County in at least two years.
In February, Laguna Brisas, a 176-unit building in Laguna Niguel, sold for $96,000 per unit, said Jay Skenderian of Morgan Skenderian Investment Real Estate Group, which specializes in Orange County.
The Resorts, whose three buildings are named after European resorts, is considered a trophy property, said David Jones, vice president of Marcus & Millichap, a leading apartment brokerage.
The complex straddles the San Joaquin Hills Transportation Corridor that links south Orange County to Irvine and Newport Beach. The two- and three-story buildings, erected in 1991 and 1992, attract rents ranging from $975 to about $1,700.
Analysts said the units commanded such a high price because southern Orange County has newer properties that attract some of the highest-income earners in the Southland, resulting in low vacancy rates.
Despite high demand, there are few buildings available for institutional investors to buy. Only seven apartment complexes have been sold in south Orange County over the last two years, because they are highly profitable and their values are rising.
Demand has grown because buyers realize that prices are not going any lower, Jones said.
“Buyers realize that prices have bottomed out, and if they don’t get in right now, they could miss more appreciation and an opportunity,” he said.
Gerson Bakar, the buyer, primarily owns residential properties in the Bay Area. Its Orange County holdings include the Park Newport Apartments in Newport Beach, a 1,300-unit complex across the street from the Fashion Island shopping center.
To buy the Resorts, Gerson recently sold Carmel Plaza in Carmel, a shopping center with 52 retailers, said Rob Cormack, Gerson’s president.
AEW sold the complex because it could get a high price, and to concentrate on its industrial real estate properties, said Martha Thurber, director of AEW Capital Management.
