Irvine-based real estate investor Bascom Group has acquired the 474-unit Tennis Club Apartments in the San Fernando Valley's Warner Center commercial district. Bascom and its unidentified institutional financial partner last week bought the 30-year-old property from a limited partnership known as Warner Center Group for $41 million, or about $86,500 per unit.
The new owners will invest an additional $3 million for improvements to units and common spaces, said Jerry Fink, a Bascom managing director. The complex at 22100 Erwin St. comprises six four-story buildings.
With apartment rents throughout the Southland climbing, Fink and company expect Tennis Club to generate substantially more revenue within about three years. Tennis Club's mostly one- and two-bedroom units now rent for about $720 to $1,400, with the newest tenants typically paying $950 and above.
San Fernando Valley apartment values have risen during the last several months, said Jon Tull, research manager with the Encino office of brokerage Marcus & Millichap.
Rents in larger complexes in the Encino, Tarzana and Woodland Hills vicinity--now averaging just under $1,100--are likely to appreciate another 6% to 8% within a year, after rising 8% from mid-1998 to mid-1999, Tull predicted.
Valley apartment communities of 100 or more units sold for an average of $53,000 per unit in 1997, with the figure jumping to $64,000 for the first half of 1999.
Bascom, founded three years ago by Fink and partners David Kim and Derek Chen, has purchased more than 3,300 apartment units during the last two years.
Bascom and Los Angeles-based Magellan Group have also teamed up to buy more than 2.4 million square feet of industrial buildings through their Southern California Industrial Fund.
Mike Krantz of Southwest Investments brokered the Tennis Club sale, and Gary Moser of George Smith Partners helped secure financing through Wells Fargo Bank.
Bascom recently bought the 152-unit Parkview Village Apartments in Torrance for $12 million and the 160-unit Cypress Grove Apartments in Cypress for $9.4 million.