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Equity Residential sells $135M worth of Westside LA apartments
Xenon Investment, Wiseman Residential buy buildings before ULA tax takes effect
Equity Residential has cashed out of seven multifamily buildings in Los Angeles.
The Chicago-based apartment REIT sold 247 units for about $135 million, the firm’s CEO said on an earnings call last week.
Equity Residential did not state which buildings it sold, though property records show the firm sold seven buildings splattered across West L.A.
The REIT had bought the complexes — named the Westside Villas — about 25 years ago for a rough total of $62 million, according to the firm’s annual report last year.
All of the properties were sold before L.A.’s new transfer taxes — adding 4 percent to all sales over $5 million and 5.5 percent onto all sales over $10 million — went into effect on April 1. By getting the deal done before, Equity Residential saved about $7.4 million in additional taxes.
Equity Residential, under the helm of founder Sam Zell, has built up a reputation for acquiring distressed assets — the firm has “taken advantage of dislocation in the market” in the past, chief investment officer Alexander Brackenridge said on the earnings call.
“We’re certainly set up to that,” he said. “In the meantime, we’re trading in and out of properties — dispose opportunistically and taking advantage of acquisitions that we see.”
In Century City, Equity Residential sold a 113-unit, two-building complex at 2201-2245 Beverly Glen Boulevard for $66.1 million, or about $585,000 per unit, records show. Xenon Investment, run by Rohit Mehta, bought the complex.
Equity Residential also sold a 36-unit complex at 1845 Butler Avenue in Sawtelle for $19 million, or about $528,000 per unit, records show. Wiseman Residential, a real estate acquisition firm based half a mile away, bought the complex using a $11.4 million loan from Mechanics Bank.
Wiseman bought another 36-unit complex at 1561 South Barrington Avenue from Equity Residential for $18 million, or about $500,000 per unit, records show, using a separate $10.5 million loan from Mechanics Bank.
Also in Sawtelle, Equity Residential sold 1251 Barry Avenue, which has 18 units, for $10.75 million to Emmett Ochs Investment, an acquisition firm based in Brentwood. Emmett Ochs used a $5.1 million acquisition loan from First Republic Bank, the now defunct bank that was acquired by JPMorgan Chase last week.
The remaining two complexes, also located in Sawtelle, were sold by Equity Residential to an entity linked to lawyer Kourosh Moghadam, according to property records.
Moghadam bought the properties — at 1661 South Bundy Drive and 2033 Beloit Avenue — for a combined $21.45 million, records show, using two separate loans from Mechanics Bank.
Equity Residential still owns about 60 properties in L.A. after the sale — about 15,000 units, according to its annual filing.
On its earnings call last week, Equity Residential CEO Mark Parrell said the company was figuring out ways to still actively trade in Southern California, without triggering the transfer tax in L.A.
“We’re just going to figure out different ways to do it,” he said. “Maybe you’re selling properties in Ventura County instead or outside the city of San Francisco and the County of Los Angeles, and we have plenty of those, too. So we’ve got other levers to pull.”