Case Studies | The Waterfront
The Waterfront
161-Unit Multi-Family Community
211 Yacht Club Way | Redondo Beach, CA
Sales Price: $49,000,000
Seller: The Bascom Group and Rockpoint Group
Buyer: Allen Ginsburg, M.D.
Units: 161
Price per Unit: $304,348
Price per Sq. Ft.: $391.84
Current CAP: 5.41
Current GRM: 11.74
Market CAP: 6.75
Market GRM: 9.24
Year Built: 1969 (Renovated 2006-2007)
Lot Size Sq. Ft.: 158,994
Gross Bldg. Sq. Ft.: 125,050
Net Rentable Sq. Ft.: 125,050
Financing: Fannie Mae
Loan Originator/Broker: Capmark
First Loan Amount: $33,000,000
On Market Date: February 22, 2008
Close of Escrow: October 10, 2008
Seller Strategy | Business Plan
The seller extended the ground lease and completed the majority of the renovation requirements per the extension. This increased the attractiveness of this opportunity and maximized value.
Buyer Strategy | Business Plan
They buyer is a high net worth local private investor. He is a long-term cash flow-oriented investor who looks to acquire rare pride of ownership assets in the South Bay. The Waterfront was a perfect fit.
Process and Outcome
The most challenging aspect of this transaction was overcoming the objections to the 55-year ground lease. This caused many of the traditional institutional buyers to reduce their offers significantly or preclude them from making offers altogether. We were able to close at an extremely healthy price in a challenging market with limited financing sources. The Waterfront transaction exemplifies an investment trend we expect to see more frequently in the near future: institutions selling to private investors.
Client Quote
"The Harris Group provides high quality work product coupled with professional, responsive, and timely transaction management. They are great to work with!"
Scott R. McClave, Principal – Acquisitions & Finance, The Bascom Group, LLC