Deal drew multiple bids in supply-constrained market
CBRE announced the sale of a 175-unit apartment property in Palm Springs, California, to Westview Group for $20.5 million.
CBRE’s Stewart Weston, John Montakab, Paul Runkle and Eric Chen represented the buyer, a New Jersey real estate investor, in the transaction.
“This was a great income-producing opportunity for the buyer, and with additional interior upgrades the new owner can realize an even higher cash flow going forward,” said Weston.
The 1979-built property, located at 311 South Sunrise Way, features three swimming pools, barbeque areas, fitness center and laundry facility as well as an expansive greenbelt. The site contains 68 studios, 67 one- and 50 two-bedroom apartments across four buildings. New rents at the property have risen 10 percent over the past year due to strong demand and adjacency to retail and proximity to dining and entertainment venues in downtown Palm Springs.
The CBRE team also represented the seller, The Bascom Group, a private equity firm specializing in multifamily and other real estate related investments and operating companies.
“Our marketing efforts generated multiple offers, creating a competitive bidding process,” said Montakab. “The Palm Springs submarket is boasting a 95 percent occupancy rate, in addition, there are no communities planned or under construction, supporting high occupancy levels and strong rent growth prospects.”
Apartment fundamentals in Palm Springs have been extremely strong, according to CBRE research. Over the past three years, average annual rent growth has been 5.95%, while occupancy levels have averaged 95% during the same period, according to data from Axiometrics.
“The revitalization of Downtown Palm Springs coupled with supply constraints and the opportunity to further achieve higher rents through property upgrades made this a one-of-a-kind deal,” said Runkle.
CBRE Group, Inc. (NYSE:CBG), a Fortune 500 and S&P 500 company headquartered in Los Angeles, is the world’s largest commercial real estate services and investment firm (based on 2016 revenue). The company has more than 75,000 employees (excluding affiliates), and serves real estate investors and occupiers through approximately 450 offices (excluding affiliates) worldwide. CBRE offers a broad range of integrated services, including facilities, transaction and project management; property management; investment management; appraisal and valuation; property leasing; strategic consulting; property sales; mortgage services and development services. Please visit our website at www.cbre.com.