Case Studies | Encino Northridge Portfolio
Encino Northridge Portfolio
304-Unit Collection of Multi-Family Communities
5424 Newcastle Avenue | Encino/Northridge, CA
Sales Price: $52,965,000
Seller: Original Owner/Developer
Buyer: Donald T. Sterling Family Trust
Units: 304
Price per Unit: $174,227
Price per Sq. Ft.: $186.76
Current CAP: 4.45
Current GRM: 12.11
Market CAP: 7.09
Market GRM: 9.18
Year Built: 1964–1969
Lot Size Sq. Ft.: 278,784
Gross Bldg. Sq. Ft.: 283,604
Net Rentable Sq. Ft.: 283,604
Financing: All Cash
Loan Originator/Broker: N/A
First Loan Amount: N/A
On Market Date: July 17, 2007
Close of Escrow: March 31, 2008
Seller Strategy | Business Plan
The selling entity consisted of eight partners who were also the original builders of the five properties. The ninth partner had recently passed away and the portfolio was listed to satisfy the estate’s request to sell. A number of highly qualified brokerage firms were interviewed and The Harris Group was selected to represent the seller due to our level of expertise, connectedness, and intimate knowledge of the San Fernando Valley. We were the first brokerage firm to ever bring these assets to market. With the close of the transaction, the selling partners planned to go their separate ways, some to invest in individual 1031 exchanges.
Buyer Strategy | Business Plan
The buyer is an experienced investor who seeks out value-add opportunities and utilizes his management company with all properties in his portfolio. He was looking to acquire a collection of properties in prime San Fernando Valley locations and make his foray into this particular market. His goal for this portfolio is to maximize cash flow and hold long term.
Process and Outcome
This was a lengthy five-month transaction process. During this period the debt market took a turn, creating many challenges. We were able to bring in a buyer who did not require high leverage and had the ability to close with all cash, if necessary. In a transaction combining nine different decision makers, we utilized our ability to unify the best parties under the most agreeable conditions.