Four multifamily assets sold in 1031-Exchange transactions for $67.7 million

MMCC arranged $28 million in acquisition financing.


Marcus & Millichap, a leading commercial real estate investment services firm with offices throughout the United States and Canada, has announced the sale of four Southern California multifamily properties valued at $67.7 million. All four were 1031-tax exchange transactions.

“The current market for Southern California multifamily assets is favorable to investors seeking to upgrade or reposition their real estate holdings,” says Tyler Leeson, senior managing director investments in Marcus & Millichap’s Newport Beach office. “With the proper execution, 1031-tax exchanges can allow owners to use built-up equity to trade into larger or higher quality properties, increase return on equity and defer payment of capital gains taxes.”

Leeson and Drew Holden, senior associate, represented the sellers and procured the buyers. The properties are The Adelphi Apartments and The Franciscan Apartments, which together total 105 units and are located in Anaheim; and Ocean Breeze Village and Terra Oceanside, which have a total of 134 apartments and are in Oceanside.

“Our access to a wide range of inventory allows us to quickly identify properties that fit very well with the real estate goals of buyers and the sellers,” adds Holden.

Michael Derk, senior managing director capital markets, and Nick Gray, associate director, both with Marcus & Millichap Capital Corp. (MMCC), arranged $17.5 million in acquisition financing for The Adelphi Apartments and The Franciscan Apartments. The debt placement was structured with a five-year term and two years of interest-only, fixed-rate financing. Derk and Gray also arranged $10.5 million in financing for the sale of Terra Oceanside. That debt was structured with a seven-year term and three years of interest-only, fixed-rate financing.

“We locked in the interest rate on all of the deals for 120 days, which is a major exception in the current marketplace, and we leveraged our strong track record and large volume of business over the years to negotiate lower than market spreads with the lender,” notes Derk.

Kurt Hediger, senior associate, provided additional representation in the sale of Terra Oceanside, and vice president investments Matt Kipp assisted in the sales of The Adelphi Apartments and The Franciscan Apartments.

About Marcus & Millichap

With over 1,800 investment sales and financing professionals located throughout the United States and Canada, Marcus & Millichap is a leading specialist in commercial real estate investment sales, financing, research and advisory services. Founded in 1971, the firm closed nearly 9,000 transactions in 2017 with a value of approximately $42.2 billion. Marcus & Millichap has perfected a powerful system for marketing properties that combines investment specialization, local market expertise, the industry’s most comprehensive research, state-of-the-art technology, and relationships with the largest pool of qualified investors.