Multifamily Investing in Southern California

Irvine, CA – Advanced Real Estate has added another major multi-family asset to its growing portfolio. Canvas LA, a 210-unit property that sits along the 110 Freeway in Downtown Los Angeles was purchased for approximately $62 million. “It’s rare to find such a well-built, podium property like this, for under $300,000 a unit.” Said Rick Julian, CEO of Advanced. “We haven’t seen that kind of pricing in over a decade.” “The property has an ideal location across the street from Vista Hermosa Park. It’s only a 10-minute walk to all the cultural attractions of Bunker Hill including the Broad Museum, Walt Disney Concert Hall, Dorthy Chandler and Ahmanson Theater” said Paul Julian, Rick’s son and President of Advanced. “Trendy Echo Park, is also just over a mile away.” Advanced plans only light renovations at the property as the previous owner had invested over $3 million into upgrades after purchasing it in 2018. The property features a host of unique amenities including a resort-style pool with cabanas, large gym with separate cardio studio, game room, conference and office space, screening room, and sky deck with fire-pit. This was the final purchase for Advanced’s most recent acquisition Fund. That Fund also purchased Edison Long Beach, a 156-unit luxury residential high-rise, the 264-unit Surf House Apartments in Huntington Beach and the 714-unit The Grand Costa Mesa. These recent purchases made Advanced the largest buyer of apartments in Southern California in 2023. “We are long-term holders and wanted to seize this low-basis opportunity. We see a bright future for Los Angeles with the upcoming 2028 Olympics” added the Julians. Advanced will now kick off a new Fund which will be open to their “friends and family” investors and looks to continue to strategically increase its current portfolio of over 12,000 units in Southern California. “Our investor base of over 1,000 families continues to grow as we find great opportunities such as Canvas”, continued Rick Julian. The sale was brokered by Blake Rogers, Kevin Sheehan, Ryan Fitzpatrick, Chelsea Jervis, CJ Angle, Alexandra Caniglia, and Kip Malo of JLL Capital Markets. Advanced procured a $39,975,000 Freddie Mac loan, at a fixed interest-rate of 5.12% for 7 years, with full-term interest-only payments. Kevin MacKenzie, Greg Brown, Charlie Vorsheck, also of JLL Capital Markets arranged the financing. 

Irvine, CA – Advanced Real Estate (Advanced) has added another multi-family asset to its growing Orange County portfolio. Known as Beachpoint, the property consists of a 68-unit apartment building and a 12,000 square foot multi-tenant office building in Huntington Beach. Situated on Beach Boulevard, the Property is only a few miles from Huntington’s world-famous beaches and Harbor. Beachpoint is also near one of Advanced’s other recent purchases, a 264-unit community called Surf House. Most floorplans in the property are large two-bedrooms, two-bathrooms units that average 1,087 square feet. With a clubhouse, tennis court, two pickleball courts, large pool with sundeck, dog run and ample parking, Beachpoint provides amenities typically only seen on much larger properties. According to Advanced, the property was well-maintained by the prior owner, but will receive the modern upgrades their firm is known for. Advanced plans new paint, signage, an amenities overhaul, and drive-entry enhancements. The interiors will get new flooring, fixtures, a contemporary paint-scheme and the addition of washers and dryers. The off-market transaction was brokered by Gary Tolfa from the Triqor Newport Beach office, with the loan being provided by Farmers & Merchants Bank. Beachpoint was contributed by the current owner to Advanced’s “X Fund”. This new fund is a revolutionary alternative to the 1031 tax deferred exchange. Since August 2023, Advanced has joined together the owners of $75,000,000 of smaller properties. Advanced will ultimately sell this portfolio and orchestrate a 1031 tax deferred exchange into much larger and more efficient properties. Advanced is accustomed to owning large-scale properties as their portfolio includes several 400–750-unit apartment communities in Southern California.  “After purchasing over 12,000 units during the past 40 years, we have learned how much more profitable and efficient larger properties are than smaller properties. Further, the larger the property, the less competition when purchasing. This allows our investment groups to start with a lower basis,” said Paul Julian, President of Advanced. With the X Fund, private owners can now enjoy the benefits of an investment scale normally limited to major institutional investors. “We saw a swelling need in the market for investors to move out of their active property ownership and into a passive role in larger-scale properties with higher returns. This shift also rids the investor of the management and liability of owning their own properties. Prior to the X Fund, owners faced hefty taxes if they sold. These owners had to choose between selling their property and paying a major share of the proceeds in taxes or completing their own 1031 exchange. If they chose the latter, they ended up with a larger headache and even more liability,” said Rick Julian, CEO of Advanced. “The 1031 exchange process is very risky because it is difficult to find a suitable exchange in 45 days. If you have already sold your property and cannot find that exchange, you are stuck with the massive tax hit!” With the X Fund, there is no sales process. Instead, investors simply contribute their property, tax-free, into the X Fund in exchange for limited partnership shares. With one simple transaction, an investor transforms from being a single property owner, to a partner in a professionally managed, diversified portfolio of properties. At that point, the investor’s responsibilities and liabilities are eliminated. They will have a cash flow stream that continues indefinitely, while enjoying large periodic cash distributions through tax-free refinances. Most importantly, the investor is in a partnership with a well-capitalized, vertically-integrated operator with a proven 40-year track record of owning and operating a sizeable Southern California multifamily portfolio. “Advanced acquired three large Apartment communities in 2023 including the 156-unit “Edison” in Long Beach, the 264-unit “Surf House” in Huntington Beach, and the 714-unit “The Grand” in Costa Mesa. The Grand was the largest multifamily property transacted in Southern California in 2023 and the 6 th largest in the nation. These larger properties are what the X Fund will hold indefinitely,” said Julian. This is the first property acquisition from the current Advanced X Fund 24, which will be closing its acquisition period on December 31 st , 2024. Advanced will consider all property types and locations throughout the United States for the assets to be contributed into the Fund. These include multifamily, industrial buildings, retail centers, and even rental homes. About Advanced Advanced was formed in 1978 and currently owns and operates over 11,500 apartment units in Southern California with a market value of over $4 billion. Advanced funds their investments with private investors, whom they refer to as “Friends and Family.” Property management and renovation are carefully administered through their in-house management and construction arms. This vertically integrated approach allows Advanced to efficiently execute their business plan, of acquiring value-add properties in Southern California, renovating them to the highest standards, and then effectively managing them for the long-term. To learn more about Advanced please visit www.advancedrealestate.com .