What an Operator Sees
This one stopped me.
At $357,000 per unit and $345 per square foot, you simply cannot replace this in Beverly Hills. Properties like this do not hit the market often—and when they do, they are rarely available at this basis.
The 22 units average more than 1,000 square feet, and every unit appears to have substantial rent upside. Renovated apartments in this location can potentially achieve approximately $4.50–$6.00 per square foot, which could eventually push the building’s gross annual revenue above $1 million.
The buyer also acquired the property at a major discount to the $450–$500 per square foot pricing I typically see for comparable Beverly Hills apartment buildings. And at a reported 5.55% going-in cap rate, the property already produces income while the buyer patiently renovates units as they become available.
Conservatively, I believe a great operator could increase the property’s NOI and potentially reach approximately an 8% cap rate on cost over time.
This is what a potential home run looks like: a low acquisition basis, unusually large units, significant rent upside and income while you wait.
I track every commercial real estate sale in Los Angeles so you don’t have to.
If you found this useful, please share it with someone who would enjoy it.
OMs: David@AtlasBrief.LA
Connect with me on LinkedIn:
https://www.linkedin.com/in/david-safai/