Oakwood Newport Apartments Sale Sets O.C. Record : Real estate: Palo Alto firm tops bidding at nearly $125 million for 1,447-unit complex and plans $30 million more in renovations.

Oakwood Newport Apartments, the landmark 1,447-unit complex in Newport Beach, is being sold for nearly $125 million to a Northern California real estate company that plans to substantially renovate the 31-year-old property.

The deal is the most expensive apartment sale in Orange County history, surpassing last year’s sale of The Lakes in Costa Mesa, which sold for about $114 million, industry experts said.

Oakwood Newport--home to more than 2,000 people--is the county’s largest apartment complex.

The buyer is Palo Alto-based Essex Property Trust, a real estate investment trust that owns half a dozen other properties in Orange County.

Essex beat out about a dozen other bidders for the complex, including Irvine Apartment Communities, which is owned by billionaire Donald L. Bren and controls many other large apartment complexes in the area.

Officials at Essex could not be reached for comment Tuesday. The company plans to spend about $30 million upgrading Oakwood Newport, brokers said.

“They want to reposition it as a Class-A luxury building,” said Ray Eldridge, a vice president at CB Richard Ellis, who negotiated the sale with partner Joe Leon. Plans include renovating the exterior, the complex’s clubhouse and interior hallways.

Oakwood Newport was built in 1968 by Los Angeles-based R&B; Realty Group, which has owned the property ever since. It consists of two three-story, garden-style buildings: Oakwood North, with 732 units, and Oakwood South, with 715 units.

R&B;, which owns about 43 apartment complexes nationwide, put Oakwood up for sale a year ago as part of a strategy to focus on corporate housing and smaller apartment complexes, according to Kristen Zimmerman, investment manager at R&B.;

The sale price of nearly $125 million translates to about $85,000 per unit, Zimmerman said. The deal will be completed by Sept. 30.

R&B; plans to lease back about 75 units, which it will make available to corporations seeking a place to temporarily house executives, Zimmerman said. There are no plans to sell R&B;’s other Orange County apartment complex, Oakwood Seal Beach.

It was unclear whether rents at Oakwood Newport--which range from $950 for a studio to $1,650 for a two-bedroom--would rise under the new owners.

But real estate experts said the upward pressure of rents is expected to continue. Countywide, a shortage of rental housing has led to average rent hikes of 8% to 10% in recent years.

In its early days, Oakwood Newport was a haven for young single people in Newport Beach. “‘Everybody has a story about Oakwood,” Eldridge said.

Today, the complex is still popular with young professionals, though it is also home to retirees and is used for executive housing by companies such as Intel Corp. and Coldwell Banker.

Brokers Dennis Danialian and Jesse Goldstein of TCI Properties in Palo Alto also helped negotiate the deal.