A large-scale residential complex in Santa Clarita’s town center with a mix of apartments and condominiums has been sold for $56.65 million to Los Angeles real estate investors.
Decron Properties bought Madison at Town Center, which in real estate parlance is a “broken condo” complex where some of the units are owned and others are rented.
Mixed ownership at the Madison occurred when owners attempted to convert the upscale apartment center to condos during the last real estate boom. Built as a 341-unit apartment complex in 2004, the Madison was purchased by limited liability corporation Prado Town Center West in 2005 and converted to condominiums.
Prado sold 77 units to individuals in 2006 and 2007, before the economic downturn brought the housing market to a standstill. Apartment buildings emerged as real estate investments of choice after the economy began to improve, but conventional lenders are often reluctant to finance purchases of broken condo buildings in part because of the complexities of operating a property housing both owners and renters.
Decron bought the 264 apartments from Prado for about $215,000 each, about 40% below the average condo price at the Madison during the height of the market.
Decron, the real estate development and investment arm of the Nagel Family Trust, has purchased 1,500 apartment units in the last year and half and is looking for more, Decron President David Nagel said.
The company intends to accumulate a portfolio of 1,000 broken condos to operate as rentals and eventually sell when the market improves, he said.