Radius Commercial Real Estate & Investments this week announced that the 97-unit Harbor Heights Manor apartment complex near West Beach has entered the area’s hotly contested multifamily investments market with a price tag of $33 million, or roughly $340,000 per unit.
The sale could be the largest in the area since a trio of Isla Vista transactions in 2010 ranging in size from $27 million to $37 million.
Built in 1970, the property occupies a sizable footprint on a rise that sits on the doorstep of Santa Barbara City College at the corner of Cliff and Loma Alta drives.
“You can’t get any closer to campus unless you’re on campus,” Radius principal Steve Golis said.
Golis and fellow agents Brian Johnson and Jon Standring were recently named the exclusive brokerage team representing the property owner. Golis expects the property’s ideal location, in addition to numerous amenities including a swimming pool, a sauna, a game room, on-site laundry and off-street parking to be very appealing to prospective buyers just as it is to renters.
“We’ve had immediate interest from buyers all over the country who recognize the property’s long-term value,” he said, adding that it would be an ideal student housing opportunity given its close access to the college. “But it’s also attractive to straight-forward multifamily investors given its general location, scale and quality.”
The offering follows a swath of apartment sales in the area within the past several months, most notably the sale of a similar property, the 63-unit New Tahitian Apartments in Isla Vista, which was purchased by a local investor in June for $14.3 million.
“There were many things at play with that one,” said Golis, who also represented the seller in that transaction. He cited the property’s proximity to UCSB and a very tight population density in particular, both of which contribute to the market’s historically low vacancy rate of below 1 percent.
“It seems I’ve been saying a lot recently how the apartments market is on fire,” Golis said. “Clearly opportunities of this size and caliber don’t come on the market very often, and with the potential for solid, consistent rental income, it will be very attractive to many investors.”
According to Golis, another high-end rental property at 813 E. Anapamu St. received more than 20 offers earlier this year. Additionally, of the eight multifamily properties five or more units in size that are currently for sale along the South Coast, six are in escrow.
“There is very little in the way of new housing development, whether single-family or multifamily,” Golis said, adding that it contributes to the market’s low vacancy rate which translates to growth in rents and, ultimately, the popularity of multi-family properties among commercial real estate investors.
Furthermore, despite sluggish job growth over the past few months, “it’s still better than it was three months ago and much better than this time last year, and we think that has definitely manifested in the increased need for housing,” he said.
And, according to Golis, it’s the considerable popularity of the category among investors that contributed to the current owner’s decision to sell.
“They are long-term owners who weighed their options very carefully and ultimately decided that the time was right to capitalize on that investment,” he said.
— Vince Coronado is the director of marketing communications for Radius Commercial Real Estate & Investments.