‘Broken condo’ complex in Santa Clarita sells for $56.65 million
A large 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 Corp. 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 complex 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 the 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 1 1/2 years 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.
Historic Desert Hot Springs resort slated for major renovation
Two Bunch Palms Resort & Spa, one of the region’s oldest mineral water spas, was bought by a show business consortium for nearly $10 million.
Hollywood producers Steve Markoff, Donald Kushner and Elie Samaha bought the rambling 52-room resort in Desert Hot Springs with Westside real estate developer Gidi Cohen. The new owners said they would immediately begin an upgrade of the 270-acre property.
“We are laying the groundwork for major renovations throughout the resort, including a joint venture with a widely successful spa operator and expansion to include stand-alone 3,000-square-foot villas, senior housing and a private postoperative surgery rehab facility,” Cohen said.
Two Bunch Palms dates to the 1920s. Chicago mobster Al Capone allegedly built and used the sprawling complex as his West Coast hide-out. Capone’s personal bungalow is believed to include underground escape tunnels and a sentry tower for armed bodyguards.
The new owners are also planning to market a line of spa products and beverages made with the spa’s lithium-rich spring water, Cohen said.
His company, Cohen & Associates, will manage the resort and oversee improvements.
Trio of Warner Center office buildings sold for $26.4 million
A joint venture of Oakfield Realty Partners and Long Wharf Real Estate Partners has acquired three office buildings in the Warner Center district of Woodland Hills for $26.4 million.
Oakfield, a privately held commercial real estate investment firm in Los Angeles, bought 5950 Canoga Ave., 5955 De Soto Ave. and 21155 Califa St. for about $145 a square foot, real estate broker Bob Safai of Madison Partners said. Long Wharf is a Boston private equity real estate manager.
The identity of the seller was not released, but real estate data provider CoStar identified the last owner as New York-based Guggenheim Commercial Real Estate Finance.
“These buildings are in our backyard, and we prefer to invest in locations where we understand the nuances of the submarket,” said Andy Carpiac, managing partner of Oakfield.
