LOS ANGELES—California Landmark Group has acquired Lafayette Park Apartments, a 120-unit apartment complex in Koreatown for $23.5 million, GlobeSt.com has learned exclusively. The purchase underscores the firm’s investment focus in emerging markets. CLG acquisition strategy includes a renovation plan to make the property like new, but still at a 15% to 20% discount to new construction in the area.
“Lafayette Park is actually a really great part of Koreatown, and the area around it is changing dramatically,” Ken Kahan, president of California Landmark Group, tells GlobeSt.com. “There is a lot of development going on along Wilshire, and we see this is as a fundamentally important part to the redevelopment of Koreatown, which really needs to grow to the east. It is a mature market, and there is a lot of opportunity for us to add value.”
Located at 349 Lafayette Park Ave. in Koreatown, the property, like much of the product in Koreatown, has not been renovated in decades. CLG plans to invest $4 million into the property to make it a like-new building. “The building has been neglected for 20 years, so we are going to make this building brand new,” says Kahan. “We will replace all of the interiors and the common area, and many of the infrastructure items, like the air conditioning, the plumbing and upgrade any Wi-Fi or communication needs. It will have a brand new gym, fire pit areas and sitting areas.” The renovations also include adding a washer/dryer to each unit.
However, the building isn’t going to compete with new construction. “Our target market is a tenant that is not willing or not able to pay the rent associated with a brand new building, but wants to live in an area that is gentrifying and walkable and in a building that has the same amenities as a brand new building,” says Kahan.
CLG plans to hold the property for the long term, with Kahan saying, “We are not focused on fast money. We are focused on longevity.”
CLG purchased the property with a $17.5 million loan provided by Mesa West Capital. Mesa West VP Brandon Bachner secured the funds on behalf of CLG. Stewart Weston, SVP investments in the Newport Beach, CA office of Marcus and Millichap represented CLG in the transaction.