The new owner plans to reposition the properties through revamps including interior updates, community and lifestyle enhancements, as well as safety and infrastructure additions. Upon completion, the communities will feature new appliances, updated flooring and new amenities including after-school programming, playgrounds, swimming pools, fitness centers, privacy gates, security cameras and on-site security staff.

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The apartments across the communities have one- to three-bedroom layouts ranging from 617 to 1,250 square feet. Completed between 1981 and 1986, the assets in the portfolio include:

• Carmel Brook, a 33-building, 548-unit property at 12345 N. I-10 Service Road
• Carmel Spring, a 10-building, 400-unit property at 12151 I-10 Service Road
• Laguna Reserve, a 24-building, 348-unit property at 5131 Bundy Road
• Laguna Creek, a nine-building, 216-unit property at 6881 Parc Brittany Blvd.

The properties are within 5 miles from one another, with three of them closely clustered along Interstate 10.

Distressed sales tossed aside for recapitalization

Even though overbuilding and approaching loan maturity dates would normally point the multifamily sector towards distressed sell-offs, owners seem to prefer recapitalization strategies, which stabilize assets and prevent disruption. Lenders, too, appear cooperative towards restructuring their financing terms, preferring to work with multifamily owners rather than office borrowers. The collateral is financeable and easier to sell compared to their office counterparts, according to Berkadia Vice President Josh Bodin.

Hamilton Zanze CEO Kurt Houtkooper also subscribes to the idea that the multifamily sector is heading towards recovery, though the transaction volume and valuations continue to show signs of a slowdown in the past few years. The gap between buyer and seller expectations over asset valuations and pricing is also another factor that contributes to a decline in transactions, Zanze notes.