LONG BEACH, CA – Stepp Commercial, a leading multifamily brokerage firm in the Long Beach market, has completed $35.3 million sale of Patio Gardens, a 127-unit apartment community in the Traffic Circle neighborhood of Long Beach. Built in 1958, the property is comprised of 19, two-story buildings and is situated on nearly six acres fronting Los Coyotes Diagonal.
Robert Stepp, Principal with Stepp Commercial represented the buyer, Long Beach-based Jaison Robinson who was in a complicated 1031 exchange. Stepp also represented Jaison Robinson in the downleg of his 1031 exchange sale that consisted of the sale of ten individual Long Beach apartment properties totaling 196 units and valued at approximately $34.7 million. These 10 assets were sold over the first few months of 2016, enabling the buyer to trade into Patio Gardens as part of its upleg. The seller, Patio Gardens, LLC was represented by Gregory Z. Harris of Marcus & Millichap.
“The sales of the downlegs and upleg of this 1031 exchange were extremely complicated and time sensitive,” said Stepp. “The client has owned apartment properties in Long Beach for 30 years and had had his eye on Patio Gardens for some time. His long-term investment strategy was to consolidate his smaller buildings located in less desirable areas and exchange into this institutional-sized property in a B-plus submarket. When we heard the property would be coming on the market in a few weeks, we immediately started identifying and marketing the 10 downleg properties and were able to sell several of them within a week.”
Stepp observed that with a property the size of Patio Gardens, most buyers have to answer to investment committees. “My client was purchasing the property for his father and himself, therefore, we used the fact that we didn’t need a lengthy due diligence period to our advantage.”
There was strong competition for Patio Gardens with a total of 13 offers, indicating the continued demand for the Long Beach rental market and this quality asset. Patio Gardens provided the buyer with the opportunity to consolidate his smaller properties and own a larger building in a better location with less maintenance and increased in-place cash flow. The property also offered substantial upside and the buyer plans to invest $700,000 in order to upgrade the unit interiors with condo quality appliances and finishes with the goal of bringing rents to market rates and filling some of the area’s demand for luxury rental units.
Patio Gardens consists entirely of spacious two-bedroom units averaging 1,000 square feet. About 80 percent of the units include outdoor patios or backyards. Forty-eight units include one bathroom while 79 include one-and-a-half bathrooms. The community offers beautifully landscaped gardens, lush lawns, laundry facilities, fitness center, and parking garages.
The community is less than two miles from California State University of Long Beach and is three miles from the popular Belmont Shore neighborhood.
About Stepp Commercial: Stepp Commercial is a brokerage firm specializing in the multifamily sector for properties ranging in size from $1 million to $50 million in Long Beach. Stepp Commercial’s mission is to provide apartment owners with a fully integrated sales platform that includes comprehensive market knowledge and local real estate expertise to successfully complete any type of multifamily transaction. Specializing in one key market gives Stepp Commercial a competitive advantage which accelerates and ensures client success. For more information visit SteppCommercial.com