RESEDA, CA - The Mogharebi Group (TMG) has successfully arranged the $17.6 million sale of Pinetree Terrace Apartments, a 58-unit multifamily community in Reseda, CA. Otto Ozen, Executive Vice President, and Brian Nakamura, Senior Vice President, represented the seller.
In a significant demonstration of changing market dynamics, this transaction emphasizes the trend of multifamily assets being converted into affordable housing to provide more affordable rents. The sale underscores a rising inclination toward converting market-rate properties to affordable housing options.
Built in 1978 and on the market for the first time, the Pinetree Terrace apartment community is 100% occupied and sits on a large lot with 280 feet of frontage at 7940 Reseda Boulevard. The property comprises five two-story apartment buildings featuring a mix of one-, two-, and three-bedroom floor plans ranging from 900 to 1,263 square feet, each equipped with washer and dryer hookups. Pinetree Terrace is a well-appointed community offering amenities such as a pool and spa, fitness center, laundry room, leasing office, and subterranean parking.
The seller, GLS Building Corp, who also developed the property, decided to divest from the Los Angeles multifamily market and reallocate investments into other asset classes. This strategy mirrors a broader trend where investors mitigate risk and capitalize on different market opportunities, while also addressing challenges associated with the ULA tax imposed in April 2023.
The nonprofit buyer, Foundation for Affordable Housing, is experienced in conversion projects and intends to transform the property to offer long-term affordable housing solutions for local community members, especially social workers and teachers.
"Despite the challenges in the current economic environment, our team's persistence and in-depth knowledge of the affordable housing sector enabled us to achieve a successful outcome," said Ozen. "Ultimately, we secured an Affordable Housing Buyer, which exempted the seller from the 5.5% ULA Mansion Tax, saving them nearly $1 million in ULA taxes. We anticipate that the trend of converting market-rate multifamily assets to affordable housing will continue to grow."
About The Mogharebi Group: The Mogharebi Group (mogharebi.com) is a leader in real estate investment and advisory, specializing in the multifamily property sector throughout the Western U.S. with nationwide reach. Backed by unparalleled local market knowledge, an extensive global network of top real estate investors, state-of-the-art technology, and direct access to capital with over $850 million in revolving inventory, The Mogharebi Group is the best choice to meet the needs of major private investors and investment funds.