Burbank, Calif. – May 7, 2015 – (RealEstateRama) — In a market where value-add commercial real estate is increasingly difficult for investors to find, Interstate Equities Corporation (IEC) has proven that “un-loved” deals are still out there.
The firm has just acquired an off-market, 34-unit multifamily property in a walkable distance from downtown Burbank, California – an investment feat in today’s market, according to Marshall Boyd, President of IEC.
“This property is the type of ‘diamond in the rough’ that we target,” says Boyd. “Built in 1958, the community has never been renovated, making it perfectly poised for the type of transformation that IEC is known for.”
Boyd notes that the asset, which is situated on 0.4 acres approximately a mile east of Burbank’s downtown, meets each of IEC’s stringent acquisition requirements – a strategic approach that has proven fruitful for the firm’s institutional investors throughout the U.S.
“Our niche is well located, scrappy deals,” says IEC Director Peter Casey. “By pinpointing our focus and acquiring multifamily properties in Southern California and the Bay Area that are significantly undermanaged, we are able to deliver extremely attractive yields and risk adjusted returns to our investors.”
IEC, an institutional fund manager, invests in properties on behalf of endowments, family offices and pension funds. The firm has been active in investment management for more than three and a half decades.
The Burbank asset, “Citra Apartments,” will undergo a series of improvements that will enable IEC to grow rental rates by approximately $500 per unit in just three to six months, according to Boyd.
The firm plans to fill in the community’s out-of-date swimming pool, which is currently a safety hazard for approximately 12 units that open directly in front of its edge. In its place, IEC will create a modern lounge where residents can interact and engage. IEC also plans extensive interior and exterior improvements, including new flooring, paint and appliances, as well as a contemporary rooftop deck for residents to enjoy.
“By eliminating safety hazards, introducing conveniences, and creating a fresh, modern aesthetic throughout the property, we will attract a strong and consistent renter base,” says Boyd, who notes that IEC is somewhat contrarian when it comes to apartment owners’ current Millennial craze.
“We don’t specifically target Millennials,” he says. “What we’re doing is straightforward and strategic. We’re buying well-located, run-down product and converting it into quality housing that will attract renters of all ages.”
Boyd continues, “Even with the substantial rent increase we will achieve in this asset, renters will still be paying less than $1,600 per month for a one-bedroom apartment in walking distance to downtown Burbank. That level of pricing is nearly impossible to find in this area.”
IEC acquired the property for $6.7 million from a Los Angeles-based second-generation family owner. Bryan Schellinger and Tyler Martin of ARA Newmark represented IEC in the acquisition.
The property is located at 700 S. 6th Street in Burbank, California.
Founded in 1981, Interstate Equities Corporation (IEC) is an institutional fund manager that invests in and transforms California apartment communities on behalf of endowments, family offices and pension funds. The firm has taken roughly 85 properties full-cycle for its investors, and has completed more than $1.5 billion in real estate transactions since 2006.
Utilizing repositioning strategies via its integrated property management platform, IEC secures and generates value for its long-term partners. The firm credits strong relationships and an academic, data-driven approach to investment and property management as the core of the consistent results it delivers to investors.
More information is available at www.interstateequities.com.
Jenn Quader or Lexi Astfalk
Brower, Miller & Cole
Lastfalk (at) browermillercole (dot) com