Irvine and San Mateo, California
On September 22, 2017, Sares Regis Multifamily Fund, L.P. (“Fund I”) sold Solterra at Civic Center (“Solterra”), located in Norwalk, California, for $58.0 million (approximately $302,000 per unit) to a private buyer. Solterra, a 192-unit, Class B garden-style apartment community originally acquired for $45.8 million, was Fund I’s first acquisition in 2013. Built in 1987, the property is located just off the Interstate 5 freeway near the Los Angeles / Orange County border, in close proximity to two major employers, Los Angeles County and Cerritos College. The Fund undertook a value-add capital improvement program that included redesigning the existing leasing office and upgrading the common areas, including the fitness room and pool area amenities. Unit interiors for premium units were upgraded with stainless steel appliances, granite countertops and new fixtures in the kitchen and bathrooms.
“Solterra is a solid example of the strength of our vertically integrated platform, comprising of comprehensive acquisition, asset management, property management and construction capabilities. We have successfully executed our targeted renovation program to achieve our desired rent premiums and resulting strength in operating performance,” said Ken Gladstein, the Fund’s President.
Concurrent with its disposition activities, Sares Regis Multifamily Value-Add Fund II (“Fund II”), which closed on $304 million of equity commitments in August 2016, remains an active buyer throughout the rapidly growing Western U.S. region in which it operates. “Fund II has invested more than 80% of its equity commitments, and we continue to see a robust pipeline for acquisitions of Class B product that are prime candidates for our value-enhancing strategy,” said Gladstein.
The sale of Solterra represents Fund I’s fourth successful exit in less than three months. “We have been seeing a strong appetite for well-located, renovated properties from both institutional and private investors resulting in multiple offers from a broad spectrum of buyers”, said Bill Montgomery, the Fund’s Chief Investment Officer. “As a result of the success of our repositioning strategies for Solterra and the other Fund I properties, the five realized investments to date have collectively achieved a gross internal rate of return in excess of 20%”, he added. Fund I, which closed on approximately $114 million of equity commitments in 2013, has now distributed more than 100% of its invested equity back to its investors, while still holding four of its original nine investments.
Other recent realizations by Fund I include: the sale of Summit, a 96-unit apartment community located in Redmond, Washington, for $29.6 million in September 2017; the sale of Arabella, a 156-unit garden-style community located in Denver, Colorado, for $29.6 million in August 2017; and the sale of The Hills of Diamond Bar, a 204-unit garden-style apartment community located in Diamond Bar, California, for $60.9 million in July 2017.
About Sares Regis and Sares Regis Multifamily Funds
As a leading western U.S. real estate investor and developer founded in 1993, Sares Regis manages a portfolio of over 17,500 units for its partners and investor clients. With the Sares Regis Multifamily Fund series, which launched in 2013, Sares Regis has allocated over $400 million of equity across 23 Class B multifamily assets with a total capitalization over $1.1 billion in its target markets in the Western United States. For further information on the Sares Regis multifamily fund platform, visit: https://srgfunds.com