NORTH HOLLYWOOD LOFTS SELL FOR $93M

North Hollywood Luxury Lofts Sell for $93M
January 29, 2007
By Tonie Auer, Southwest Correspondent

http://www.commercialpropertynews.com/cpn/article_display.jsp?vnu_content_id=1003538861

Taking advantage of luxury loft apartments in the NoHo Arts District of North Hollywood, Calif., Redwood Partners and Rockwood Capital purchased NoHo for $92.5 million from J.H. Snyder Company.

NoHo Lofts (pictured) is a 292 unit luxury apartment community primarily comprised of loft-style units located at 11136 Chandler Boulevard in the NoHo Arts District of North Hollywood. The NoHo Arts District is a new Los Angeles community located near Valley Village and North Hollywood, which is home to contemporary theaters, art galleries, cafes and interesting shops. NoHo Lofts is within walking distance of the Academy of Television Arts, immediately north of Universal Studios, and immediately west of Burbank—the headquarters city of Walt Disney Company, NBC, the West Coast operations of ABC and Warner Bros. A Metro Rail station is located in the one-square-mile NoHo Arts District, as well as the North Hollywood station of the Red Line, and the terminus of the Metro Orange Line buses.

Transwestern’s multi-housing capital advisors in Los Angeles arranged the sale with Curtis Palmer and Herb Chase, managing directors of Transwestern multi-housing capital advisors, representing the seller and the buyer.

"From the seller's standpoint, takes way all the lease-up risk as the buyer is taking over responsibility for leasing up the property and for the buyer, who is a long term operator of apartments, they are buying a fantastic asset in a location that is the hub of the metro line and terminus for all the buses," Curtis Palmer, managing director of Transwestern told CPN. "The operating fundamentals are outstanding, especially as the NoHo Arts District continues to improve."

Los Angeles-area apartments offer solid underlying fundamentals, led by increasing occupancy and accelerating rent growth. As the gap between the average apartment rent and a mortgage payment for the median-priced home widens further, the local renter pool will continue to expand. Meanwhile, strong employment and population growth in the
prime renter demographic will also sustain demand. As a result, vacancy is expected to hover around 3 percent, allowing owners to continue to increase revenues through stronger rent growth, according to Marcus & Millichap Real Estate Investment Brokerage Co.’s Los Angeles County Metro Area October 2006 apartment research quarterly update.

After gaining 30,000 jobs in 2005, employment in the Los Angeles metro area is expected to post a 0.6 percent increase in 2006 with the addition of 26,000 jobs, the report stated. Completions on new construction will increase slightly this year, as developers deliver 5,100 units. While the total this year is up from 2005, it represents a minor 0.7 percent addition to existing apartment inventory. The total will likely be insufficient to accommodate demand growth, according to Marcus & Millichap Real Estate Investment Brokerage Co.