Multifamily real estate investment manager CP Capital has completed the sale of a Los Angeles-area apartment complex with plans to open three other projects across the country totaling more than 1,300 units as the company looks to grow in the sector.
The firm sold The Gabriel, a project completed with partner Greystar in April 2022 after a construction process that included challenges ranging from labor shortages and supply chain disruptions during the COVID-19 pandemic to issues with utility meters, CP Capital said.
Located at 2771 North Garey Ave. in Pomona, California, the property includes 312 units ranging from one- to three-bedrooms averaging 901 square feet, according to CP Capital. The transit-oriented development that includes Wi-Fi thermostats and keyless entry sits adjacent to the Pomona North Metro Link Station and is near Route 66 and Route 67. The complex was 94% leased at the time of the transaction.
“The multifamily sector has faced challenges in recent years, but we remain optimistic due to its resilience amidst economic uncertainty and the heightened levels of renter demand that should persist long after the current wave of new supply is fully absorbed,” Kristi Nootens, co-head at CP Capital, said in a statement. “The sale of The Gabriel, along with significant milestones across our portfolio, reinforces our belief that the sector is entering a new era of growth.”
Rents at the property average $2,649, a 1.3% increase over this time last year and a nearly 8% premium over similar properties nearby, according to CoStar data. Vacancy rates are in line with comparable apartments that average a 6.6% vacancy rate.
Positive fundamentals
The San Gabriel Valley has completed $344 million in apartment transactions over the past 12 months, below the $599 million yearly over the past decade as the high cost of debt has dragged down property values nearly 15% from peaks two years ago. But transaction volume has been improving. After registering just $53.58 million in sales volume over the first quarter of 2024, the year’s third quarter ended roughly 155% higher at more than $136 million.
Underlining the positive fundamentals and growing demand for rental housing is CP Capital’s development pipeline. The company has recently opened seven developments that are in active lease-up in markets across Charleston, South Carolina; Tampa, Florida; Atlanta, Phoenix, Denver, and Boston. The company plans an additional property sale this fall, and currently has three multifamily projects under construction near Austin, Texas; Washington, D.C.; and Philadelphia.
CP Capital was founded in 1989 with a focus on opportunistic and value-add rental apartment investments. Over 35 years, the company has invested nearly $16 billion in real estate totaling more than 70,000 residential units and 21 million square feet of commercial space.