Proposition 10: A Threat to All Property Owners and Investors
A four-story, 75-unit multifamily building in West Hollywood traded hands last month for roughly $22 million, or $293,000 a unit.
Alan Nissel of Miracle Mile real estate investment, development and management firm Wilshire Skyline Inc. bought the 68,000-square-foot building at 7513 Fountain Ave. from Santa Monica multifamily investor Jeffrey Nemoy. Nissel purchased the rent-controlled property after selling properties at 444-46 N. Oakhurst Drive in Beverly Hills and 2025 Argyle Ave. in Hollywood and using a 1031 exchange to reinvest the capital earned from the two sales. The Oakhurst multifamily buildings sold for $10.1 million; the Argyle building for $6.8 million. Nemoy was not actively marketing the fully occupied property at the time that he was approached about the sale, said Azzi Advisors’ Tony Azzi, who represented Nissel in the transaction along with his associate Rabbie Banafsheha. “We had a client with an exchange who only buys in good locations, so we came to him even though it wasn’t listed,” Azzi said. The sale price was slightly higher than the $262,000-a-unit average for the area, according to CoStar. Nissel plans to hold on to the building, Azzi said. “Obviously they are going to fix the units as they become vacant and make them super nice,” he said. “That’s all you can do when it’s rent controlled.” The building consists of 600-square-foot studio apartments, which rent for roughly $1,200 a month; 750-square-foot one-bedroom apartments, which rent for roughly $1,500; and 1,000-square-foot two-bedroom apartments, which rent for roughly $2,000. “We’re in a market that’s very heated with very little inventory to buy and some sellers are taking advantage of that by selling in exchanges to upgrade to bigger buildings,” Azzi said. Stephen Saltzman of Keller Williams Commercial in Santa Monica represented the seller. By Hannah Miet, The Los Angeles Business Journal