A Westwood firm is making a $16 million bet on the San Fernando Valley’s apartment market.
California Landmark Group recently paid $15 million for a portfolio of three apartment buildings near Ventura Boulevard in the Encino/Tarzana area and is planning about $1 million in renovations over the next two years, the company said Wednesday.
“The properties are extremely well located south of the Ventura Freeway and north of Ventura Boulevard and have a tremendous upside,” Landmark President Ken Kahan said.
The company bought the properties totaling 112 units from a San Diego lender that foreclosed on the portfolio in 2008, he said.
The portfolio consists of 44 units at 5445 Lindley Ave., 44 units at 5239-5305 Lindley Ave. and 29 units at 5168 Yarmouth Ave.
The buildings were built in the late 1950s and early 1960s and are showing their age.
“They’ve very neglected, their rents are low and the units are not well-kept,” Kahan said.
Rents at the three complexes average $1,060, which is about 20 percent below the market. Occupancy is about 95 percent, which is average for the Valley, Kahan said.
The work will cater to the demands of tenants, and Landmark will reposition the properties to attract high-end tenants.
“Part of the excitement on our part has to do with the fact that you have a younger demographic and younger professionals who desire to be in the area,” Kahan said.
The company currently owns about 200 units in Northridge.
Landmark was formed in 1988 and acquires, rehabilitates and develops real estate throughout Southern California.
Economist William W. Roberts, director of the San Fernando Valley Economic Research Center at CSUN, said it is encouraging to see a $16 million investment in the area’s multifamily market.
“It’s good to see some movement in the housing area. It’s a long-term investment, and they see very good signs and positives for the housing market in the Valley. They wouldn’t be buying unless they were expecting a significant return on it,” Roberts said.