The Bascom Group, an Irvine-based real estate private equity firm, recently sold a 112-unit multifamily complex in Downey for $37.6 million to a private buyer in a deal facilitated by Northmarq.
Located at 12535 Brookshire Ave., The Square is 94% occupied and one of nine multifamily buildings in the area with more than 100 units.
Northmarq also arranged $25.6 million in financing from Freddie Mac for the buyer with a seven-year term, four of which are interest only, at a 5.05% rate.
“The private buyer is viewing this as a long-term hold and was able to secure a low-rate loan with enough (interest only) that allows them to generate enough cash from operations to fund their capital improvement plans for the property,” said Mike Smith, managing director of Northmarq’s Beverly Hills-based investment sales team.
The Bascom Group first purchased the building in 2015 for $25.5 million and has since renovated 71% of the units, including adding in-unit washers and dryers. The new buyer first plans to make exterior and maintenance improvements and “if economics continue to support it,” Smith said they’ll look into renovating the remaining units.
“The Square is a great asset that fills a much-needed demand for housing in Downey,” Smith said.
He also pointed to the property’s share of largescale floorplans with 43 three-bedroom units as an attraction for residents. Aside from appealing to residents, Smith outlined how a deal like this aligns with today’s investment market.
“Well capitalized buyers are taking advantage of the current market and beating out competition that may be on the sideline or rely on third party capital,” Smith said. “The investment fundamentals in Los Angeles County remain strong and buyers (are) eager to buy in markets with a very limited development pipeline with the expectation of strong future rent growth.”
Read More: PE Firm Sells Apartments For $37.6M
