Phoenix Realty buys Long Beach apartment complex
New York investment firm Phoenix Realty Group bought a Long Beach apartment complex last month for $34.5 million, the latest in a string of acquisitions targeting Southern California residential properties.
Since December 2010, Phoenix Realty has spent $228 million to acquire and improve 11 apartment complexes in the region. Most of them were in Riverside and San Bernardino counties, where company executives expect to see growing demand from renters even though the Inland Empire was hit hard in the economic downturn.
“We try to find the areas that get under-looked,” Managing Director Edward Ratinoff said. “When Southern California comes back, the Inland Empire will get its fair share of growth.”
Phoenix Realty focuses on buying what it calls workforce housing, or apartments serving workers with blue-collar or lower-paying white-collar jobs, he said. The buildings are generally full, but have the potential to generate higher rents after improvements such as updated kitchens are made.
The company’s new Long Beach property is called the Crossings at the Bay, which Phoenix Realty acquired from BPG Properties of Philadelphia. Los Angeles asset manager New Standard Equities, which helped put the deal together, will oversee improvements to the Crossings at the Bay and operate the 237-unit complex that was built in 1963.
Apartments are on the upswing, Ratinoff said. Landlords are reducing concessions such as free parking intended to attract tenants and raising rents in some neighborhoods. “We believe the market has turned,” he said.
Tenants are remaining renters for longer than they previously did, said real estate broker Dean Zander of Hendricks & Partners.
“More renters are entering the market every day,” Zander said, as so-called echo boomers enter the job market and people who doubled up with family and friends during the recession strike out on their own. Many young people lack the ability or desire to buy a home and rents are still often cheaper than mortgage payments, he said.
Phoenix Realty also recently completed the $36.4-million acquisition of Canyon Creek, a 288-unit apartment complex in Riverside.
-- Roger Vincent
Photo: The Crossings at the Bay apartments in Long Beach. Credit: BPG Properties