Equity Residential has sold Regency Palms, a 310-unit gated multifamily community in Huntington Beach, Calif., to a private buyer in Orange County for $127 million. The Chicago-based multifamily REIT owned the asset for nearly 30 years.
The transaction was arranged by a team from The Mogharebi Group’s Costa Mesa, Calif., headquarters including Senior Vice Presidents Brett Bayless, Bryan LaBar and Associate Advisor Nick Earl.
According to Yardi Matrix data, the seller, a REIT founded by Sam Zell, acquired the property at 6762 Warner Ave. from an unidentified seller for approximately $4.3 million in March 1996. In October, Equity Residential sold another Southern California asset it had acquired the same year, Summerset Village, for $106.7 million, in a deal arranged by IPA. The REIT had acquired the 280-unit community in Chatsworth, Calif., for $25.5 million, according to Yardi Matrix.
Bayless, in prepared remarks, said that the Huntington Beach sale was an example of private investors taking advantage of a period of buyer hesitation as institutional capital remains on the sidelines. LaBar, in the same statement, noted that these kinds of transactions can be seen as the early signs of a stabilizing market and an indication of the long-term demand for Southern California assets.
Regency Palms
The 13.90-acre property is located less than 3 miles from the coast. It has a mix of one- and two-bedroom apartments with balconies or patios in nearly 40 two-story buildings. Units range in size from 640 to 1,020 square feet with an average of 814 square feet. Rents range from $2,158 to $2,951 with an average of $2,489, according to Yardi Matrix data. The property was 99 percent occupied at the time of the sale.
Community amenities include three swimming pools, outdoor grilling areas, onsite laundry facilities and two gated entrances. There are 620 parking spaces and covered parking is available.
Regency Palms was completed in 1969. It benefits from numerous demand drivers including highly ranked schools, proximity to Orange County’s beaches and strong rental demand due to the high cost of homeownership in the area. The average single-family home price in Huntington Beach is nearly $1.3 million.
