In a 1031 exchange between undisclosed parties, Vio Costa Mesa, an 84-unit multifamily property in Costa Mesa, California, has been sold for $28 million, which equates to $333,333 per unit.
Built in 1973, Vio Costa Mesa is currently under renovation. The property sold in “as is” condition after a 14-day due diligence period.
Tyler Leeson, senior managing director investments; Kurt Hediger, senior associate; and Matt Kipp, VP investments in Marcus & Millichap’s Newport Beach, California, office represented the buyer and arranged the sale of a 54-unit apartment asset in Westminster, California, in phase one of the exchange. Michael Derk, senior managing director capital markets, and Nick Gray, associate director, both with Marcus & Millichap Capital Corp. arranged $14,715,000 in acquisition financing for the purchase of Vio Costa Mesa. The debt placement was structured on a nonrecourse basis with four years of interest-only and a $2 million post-closing earnout.
“Client benefits of the exchange include obtaining a larger, newer property in a superior location and increasing potential annual gross rental income by 96 percent,” Leeson says.
Hediger adds, “Year-over-year rent growth continues to trend upward in westside Costa Mesa, and multi-housing stock keeps increasing in value. Vio Costa Mesa’s sales price and potential for revenue growth demonstrate the strength of this submarket.”