Bascom/Oaktree JV to Purchase $250M in M-F Properties Throughout U.S.
- Jul 03, 2014
The Springs Apartments in Southern California is the first multi-family acquisition made by a new joint venture formed between The Bascom Group and funds managed by Oaktree Capital Management, L.P. to acquire $250 million in value-added multi-family properties.
The JV paid $43.2 million for The Springs, a 320-unit, 13.3-acre apartment community located at 650 Ebbcreek Drive, West Corona, Calif. Debt financing was provided by OneWestBank and sourced by Brian Eisendrath of CBRE. The seller was not identified.
“We are excited about our partnership with Bascom. We both see continued investment opportunities in the value-add multi-family sector,” Mark Jacobs, director at Los Angeles-based Oaktree, said in a joint news release with Bascom.
While the JV will seek multi-family investments across the United States, Chad Sanderson, principal for Bascom, said the partnership would have a strong focus on Southern California.
“The Springs is located adjacent to Orange County and is surrounded by a robust employment base,” Sanderson said in the release. “As fundamentals in the region continue to strengthen, we believe the investment potential of the asset will continue to benefit.”
Built in 1987, the property consists of 20 buildings. Most of the apartments are two-bedroom units; 25 percent are one-bedroom apartments. Amenities include two pools, fitness center and a landscaped courtyard with a playground and grilling stations. While the community is located in Riverside County, it is near Interstates 15 and 91 for commuters heading to Orange County or Los Angeles metro areas.
“We have seen a steady improvement in the Corona submarket over the past year. Both rents and occupancies have strengthened,” Lee Nguyen, senior vice president of operations for Bascom, noted. “We feel that The Springs is ideally positioned to benefit from a new ownership team that is ready to work hard to improve the tenant experience at the property.”
Riverside County’s multi-family market is expected to have a vacancy rate in the mid-5 percent range and increasing rents for the fifth consecutive year, according to the Marcus & Millichap National Apartment Research Report for 2014.
“In fact, rents will surpass the pre-recession high in the first half of 2014, nearly two years after national rents accomplished the same feat,” the report stated. “A combination of strong employment and modest supply growth indicates another strong year of operations for Inland Empire apartment owners.”
Bascom is a private equity firm specializing in value-added multi-family, commercial and non-performing loans and real estate related investments and operating companies. The firm has completed more than $8.5 billion in multi-family and commercial value-added transactions since 1996, including more than 240 multi-family properties containing more than 64,500 units. One of its recent acquisitions was Sierra at Fall Creek, a 252-unit multi-family community in Houston, which closed in June. The price it paid was not disclosed. In April, it paid $13.4 million to acquire Four Winds Apartments, a 138-unit garden-style community in Whittier, Calif.
Oaktree is a leading global investment manager specializing in alternative investments with $86.2 billion in assets under management as of March 31. Some of its most recent commercial real estate investments have been office buildings purchased with frequent joint venture partner Hines. In June, Oaktree and Hines acquired two Southern California office properties. The JV partners arranged a sale-leaseback deal for 1750 E. Fourth St., a 229,989-square-foot Class A office building in Santa Ana, Calif. Two days later, the team announced it had partnered up on the purchase of Brea Place, a 30-acre property in Brea, Calif., that has 557,589 square feet of office space in six buildings and seven acres for development.