The garden style community located at 8121 Broadway Avenue is encumbered by a 99-year ground lease with 41-years remaining, which adds to the already challenging conditions investors are facing when buying real estate in the Los Angeles area, according to TMG Executive Vice President Otto Ozen who advised the seller on the transaction.
“Less than 3% of all Southern California real estate transactions are subject to ground leases and we have done well more than our share,” said Ozen. “A ground lease is like a melting ice cube. You start with the maximum term and from that point on, each year is less desirable as financing becomes more difficult. However, given our experience, we were able to overcome the hurdles, generate multiple offers and close within 90 days of entering into the purchase and sale agreement.”
Citrus Court is located in Whittier, which has grown into one of the more affluent and dynamic residential areas in Southern California. Considered a Los Angeles County gateway city, it is 12 miles southeast of The City of Los Angeles where a challenging political and regulatory environment has had a chilling effect on multifamily investment. In addition to restrictive eviction policies, the city’s recently passed Measure ULA taxes sellers 4-5% on sales over $5 million. Since April 1, 2023 when the law went into effect, there have been only 10 multifamily sales over $5 million, compared to 77 sales that were recorded in the same time period the previous year.
Those investors who have been driven away from doing business in Los Angeles are also drawn to Whittier and other second ring cities for their numerous demand drivers including relative affordability, excellent schools, and access to employment hubs throughout Los Angeles, the San Gabriel Valley and Orange County.
Built in 1967, Citrus Court offers a mix of spacious studio, one-, two, and three-bedroom floorplans with an average size of 843 square feet. The seller recently completed renovations in 120 units, updating kitchens & bathrooms and installing new hardwood floors. Community amenities include on-site laundry, two swimming pools, wi-fi lounge, BBQ area, and controlled access gates.