Three separate buyers recently purchased three four-unit apartment properties in Orange County for a total of $5.48 million. This sale, facilitated by CBRE in Newport Beach, is further evidence of the current high demand in the housing market.
According to Amanda Fielder at CBRE, the fourplex multifamily market is currently very active and competitive. The limited availability of quality assets has led to intense competition among buyers seeking good investment opportunities.
While large apartment complexes were the focus of commercial buying during the pandemic, this year has seen a shift towards smaller units as family trusts engage in property exchanges. For example, just a week ago, three small apartment buildings sold for a combined $18 million. In early June, two apartment buildings in north Orange County were sold for a total of $15 million.
Now let’s take a closer look at each of these property sales:
Orange: A 57-year-old, four-unit property located at 609 S. Cypress St. was sold for $1.78 million. CBRE stated that the price exceeded the asking price by $75,000, resulting in $443,750 per unit. This property is conveniently situated near Holy Family Catholic Church, with easy access to Old Towne and Chapman University.
Dan Blackwell, Executive Vice President at CBRE, explained that they received six competitive offers, all at or above the listing price. Ultimately, they secured a buyer who utilized a non-contingent, all-cash 1031 exchange within one week of the property being marketed for sale. The sale closed within 17 days.
Santa Ana: The second four-unit property was sold for the asking price of $1.7 million. This 54-year-old property at 405 Nobel Ave. fetched $425,000 per unit. Remarkably, this was the first time the property had been listed for sale in the past 20 years.
San Clemente: Lastly, the four-unit property at 143 W. Canada was sold for $2 million, amounting to $500,000 per unit. Built in 1972, this property is conveniently located just a few blocks away from the beach.
A key factor for investor interest in these properties is the potential to increase rental rates. Dan Blackwell highlighted that all three properties had rental rates that were significantly below market value, offering great value-add opportunities for the investors. He also stated that fourplexes provide a more affordable entry point for investors interested in acquiring multifamily properties, and these particular properties were well-situated in a desirable infill market, making them attractive investment options.
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