$102 Million Los Angeles Multifamily Portfolio Sold by The Neema Group

04.15.2020
| Selling

The Neema Group at Marcus & Millichap announces the sale of a major Los Angeles portfolio consisting of 26 properties totaling 642 units. The portfolio sold for a total value of $102 million.

The private investor, a plastics broker, invested his wealth into approximately 650 apartment units over 35 years.  In early 2019, he hired the Neema Group to market five of his properties for sale throughout different submarkets of Los Angeles, collectively known as The First Five. The buildings were located in both South Los Angeles and Panorama City. After the marketing launch, they conducted over 12 showings and received 8 offers. One of the buyers that the Neema Group identified owned properties in both submarkets of South Los Angeles and Panorama City. The investment group saw the value of all five properties and the collection went under contract and sold for $18.75 million to Golden Bee Properties.

Unfortunately during the escrow process, the owner passed away, leaving control of the remaining portfolio to his trustees.  The trustees interviewed four national multifamily brokerage firms to represent the disposition of the remaining properties in the portfolio.  Ultimately, they decided to work with the Neema Group at Marcus & Millichap due to their pre-marketing due diligence, unique 14-point marketing plan, positive relationships with the management companies, and providing a controlled, detailed process from start to finish.

The remaining 21 properties were strategically divided into packages based on market location, vintage, and transaction type, in order to attract the appropriate buyer audiences.  Properties were offered both collectively and individually to produce the greatest amount of interest.

The marketing of the Wilmington Portfolio generated 10 tours and 8 offers, ultimately going under contract with one local buyer purchasing as a portfolio.  After overcoming hurdles in the escrow process and assisting the sellers in getting one of the properties out of REAP, the Wilmington Portfolio sold for $8.68 million to Cipolla Revocable Living Trust.  This included 3 buildings totaling 62 units.

The Mid-City Collection required a due diligence plan to overcome the objection of the soft-story retrofit work required.  The marketing launch generated 25 tours and 18 offers, with one buyer agreeing to purchase the entire portfolio for $33.5 million and complete soft-story retrofit work post the close of escrow.  The Mid-City Collection included 8 buildings with 175 units. 

For the final offering, known as the Armor Collection, showings were conducted in small groups via tour bus to showcase the neighborhood and the close proximity of the properties.  Multiple offers came in after the first round and one was accepted for the entire portfolio for $42 million, with no physical contingencies. Closing required overcoming multiple city and SCEP inspections in addition to other deferred maintenance that resulted in no price reduction.  The Armor Collection included 10 buildings with 300 units.

The Armor Portfolio included the sale of 26 buildings totaling 642 units within one calendar year to four separate buyers. Overall it was one of the most unique portfolio sales in all of Los Angeles. With over 20 years experience, a strong team approach, and comprehensive marketing plan, The Neema Group was able to get the desired result for the buyer and allow for a smooth process unloading one of the largest privately owned portfolios in Los Angeles.

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