Irvine, Calif.—NAI Capital’s Multifamily Services Group represented the Cypress School District of Cypress, Calif., in its $26.7 million acquisition of two multifamily properties located in Costa Mesa and Redondo Beach, Calif. Revenue from the investment will support educational programming for Cypress School District students.
Funds for the Cypress School District’s purchase of the multifamily communities came from the district’s $30.5 million sale of two long-shuttered district schools.
One of the acquired properties is Coast Apartments, a 65-unit Costa Mesa property that sold for $20 million. The three-story property is situated near a number of Orange County attractions and is steps from Orange County College.
The other property is Azure Apartments in Redondo Beach, Calif. The 16-unit apartment building, located just minutes away from the South Bay Galleria and numerous other South Bay destinations, sold for $6.65 million
Shepherding the transaction to a successful conclusion required NAI Capital to surmount a number of challenges. They included locating the most appropriate high-quality properties and ensuring they would generate requisite revenue levels for the district. “[These] were priorities of the district,” NAI Capital senior vice president Christopher Arvizu, who worked alongside NAI Capital’s David Knowlton, told MHN.
“Available inventory is very limited and in high demand, which also made it difficult. Coast Apartments was not listed on the market,” he said. “I believe Azure Apartments was listed for less than 48 hours. The district was very clear on what they were looking to acquire. Very little time was wasted underwriting potential deals that didn’t meet their criteria. We were able to capitalize on opportunity quickly. Being an expert in my product type within Los Angeles and Orange County was highly important. My only focus is multifamily.”
In addition to meeting the district’s criteria regarding location, pride of ownership and returns, the in-place property management at both communities helped assure the district that the assets would continue to benefit from stable operation.
The philosophy of Cypress School District is that education is a community endeavor. In addition to providing funding for educational programs and enriched learning opportunities for students, revenues from the purchase will go toward capital outlay costs supporting the district’s facilities master plan.
The site of one of the now-empty schools sold by Cypress School District will be transformed into 47 new single-family detached homes and a 2.9-acre municipal park. The other school site will be redeveloped into 68 new, detached single-family homes.
“We were honored to work with the Cypress School District and assist them in realizing the goals of acquiring quality multifamily properties in today’s highly-competitive marketplace,” Arvizu said. “With the successful closing of the Coast Apartments and Azure Apartments, we believe the district purchased premier properties in two locations that will be in high demand for many years.”