Institutional Property Advisors (IPA), a division of Marcus & Millichap, announced the sale of The Perch, a mixed-use asset consisting of 59 luxury residences and 2,646 square feet of ground-floor retail on the border of the Eagle Rock and Highland Park neighborhoods in Los Angeles, California. The property sold for $28.7 million, or $486,441 per unit.
“During the lockdowns due to the pandemic, Eagle Rock and Highland Park became especially preferred destinations for Downtown Los Angeles residents who wanted more space to maneuver after common areas and urban dining and entertainment venues closed down,” said Paul Darrow, Marcus & Millichap first vice president investments. “The neighborhoods also benefitted from transplants from New York and San Francisco who felt like the area was a good balance between true urban core and suburban living.” Darrow and IPA’s Kevin Green, Joseph Grabiec and Greg Harris represented the seller, Roundhouse, and procured the buyer, ABRA Management.
“The Tenant Protection Act of 2019, which placed 80s and 90s multifamily product under state rent control, and the difficulties many developers are facing in acquiring land are motivating investors to redirect significant capital towards newly constructed assets,” added Darrow. “With rents currently below pre-Covid levels and cap rates hovering 300 basis points over the 10-Year Treasury, newly constructed multifamily assets give investors the opportunity to keep pace with the market and generate attractive returns.”
Constructed on almost an entire block along Eagle Rock Boulevard, The Perch is accessible from State Route 2, and Interstates 5, 110, and 134, which connect Eagle Rock with the surrounding employment hubs. The nearby Glendale Metrolink and Highland Park Gold Line stations provide residents with light rail access to myriad suburban and urban districts throughout Southern California.
“Previously, most of the new construction in this area was larger, townhome-style product developed using the ‘small lot subdivision’ format,” noted Green. “There hasn’t been a 50-plus unit for-rent community built here in over 25 years.” Completed in 2018, the five-story property has two levels of structured parking. The floorplans include one-, two- and three-bedroom open layouts that maximize daylight and have private balconies with mountain views. Community amenities include an outdoor lounge with firepit, gated parking, and electric vehicle charging stations. The retail spaces are occupied by Hilltop Coffee + Kitchen, an artisan coffee shop, and Perch Salon, a boutique hair salon.