LOS ANGELES, CA - The Bascom Group, LLC has acquired Michigan Heights Apartments, a 28-unit community located at 2202 Michigan Avenue, Los Angeles, California for $4,950,000 or $176,786 per unit or $232 per square foot. Debt financing was provided by CTBC Bank Corp. (USA). Mashcole Property Management has been hired for third party property management. Mitch McCarthy represented Bascom in the transaction.
Built in 1985, the property consists of 28 apartment units with 43 onsite parking spaces and is located in the emerging Boyle Heights district near Downtown Los Angeles. The unit mix is comprised of three studios, one one-bedroom, one-bath unit and 24 two-bedroom, one-bath units. With original interior finishes still in place, renovation plans include modernizing units with an upgrade package that will compete with well-finished properties in the surrounding neighborhoods. This upgrade program will offer a tremendous value proposition to young professionals and creative-types seeking a modern, affordable apartment unit adjacent to major nightlife and destination locations. The property is located two blocks from an LA Metro station and is within a mile of major Southern California transportation arteries including the 5, 10, and 101 freeways. The property is bordered by the trendy Arts District of DTLA, which has received an influx in redevelopment capital. $19 Billion has been invested in DTLA over the past 15 years, with multiple civic and private mega projects currently underway. The emergence of a 24-hour DTLA has sparked an economic and social transformation of most neighborhoods on its fringe, with Boyle Heights next to follow. The Sixth Street Viaduct Project and Regional Connector will continue to improvement connectivity between Boyle Heights and downtown.
James D'Argenio, Principal for Bascom, comments, "The lack of modern, affordable housing in core Los Angeles is a problem. Repositioning Michigan Heights will create upgraded interiors at a huge rental discount to class 'A' properties in and around downtown Los Angeles."
Lee Nguyen, Senior Vice President - Operations for Bascom further adds "Boyle Heights is an exciting emerging market with strong existing apartment fundamentals. With little upgraded apartment product, we're eager to offer a modernized interior package to renters."
This is the fourth acquisition in the past year under Bascom's new Private Capital Platform, which focuses on buying smaller, value-add multifamily properties in infill locations. Amabel Townhomes, located in Highland Park, was purchased early last year and continues to benefit from market integration. 5th Street, located near downtown Santa Ana, was purchased late last year. Downtown Santa Ana continues attracting new business, with over ten restaurants opening in the coming months. Rose Villas, located in Long Beach, was purchased earlier this year and is benefitting from Long Beach redevelopment that is placing pressure on existing rental housing market. Bascom is actively looking for new projects in emerging markets with a dearth of quality, affordable housing.