Decron Properties Acquires 397-Units for $70M in M-F Deal in Simi Valley
- Nov 16, 2012
Decron Properties Corp. continues its two-year focus on the multi-family market with its latest acquisition – Creekside Apartments, a 397-unit community in Simi Valley, Calif., that it bought for $70 million.
The seller was not identified but as of June, Apartment Investment and Management Co. (Aimco) had included the complex in its portfolio. Marc Renard of Cushman & Wakefield represented the seller while Decron handled the transaction in-house.
Decron plans to invest $9 million in the 16-acre property at 1518 Patricia Ave. to upgrade the garden-style rental community.
“Creekside offers a tremendous value-add opportunity for our investors,” said David J. Nagel, president and CEO of Decron, a Los Angeles-based real estate investment and development company. “Rents are on the rise in the area, and with our planned upgrades, we see a very conservative risk profile here given that we’re really just going after what the market is already getting.”
The renovations will include installing washers and dryers in every unit as well as upgrading cabinets, countertops, appliances and flooring. Decron plans to redesign the landscaping, clubhouse, fitness centers, swimming pool decks and the front entryway.
Nagel projects that the repositioning will result in a cap rate to cost of more than 7 percent when it is completed.
Creekside Apartments was built in 1985. It has a mix of three-bedroom, two-bedroom and one-bedroom units with monthly rents ranging from $1,050 to $1,895. It is located near shopping and entertainment outlets such as the Simi Valley Town Center, Mountain Gate Plaza and El Paseo Simi.
With this transaction, Decron has acquired 2,200 residential units over the past two years, making it one of the most active privately-held buyers of California multi-family housing. In June, Decron made its first investment in Sacramento, Calif., by purchasing Broadstone at Strawberry Creek, a 264-unit multi-family community in the city’s Elk Grove submarket. It didn’t say who the seller was or how much it cost, but as of June, Decron said it had secured $120 million in financing and acquired 1,800 residential units. In February, Decron purchased The Madison at Town Center, a 264-unit apartment community in Santa Clara, Calif., for $56.5 million. The luxury residential complex is considered a “broken condo” because 77 units were sold as condominiums before the previous owner rented out the remaining apartments. Nagel said at that time Decron was looking for more “broken condo” and distressed properties.
Not all of Decron’s recent activity has been in acquisitions. In October, the firm sold The Bay Club Apartments and Marina in Marina del Rey, Calif., to Archstone for about $44 million. Decron had purchased the mixed-use property in 2005 intending to hold onto it long-term. But the firm decided market conditions were right to sell now.
Decron currently owns and manages more than 4,700 residential units with another 460 in development. It also owns and operates about 3 million square feet of commercial office and retail space in California.