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Venture Sells Apartments in Pasadena for $98 Million

SSR Realty buys luxury complex above Paseo Colorado mall and plans to step up leasing, as units are 20% vacant.

June 05, 2003|Roger Vincent | Times Staff Writer

Post Paseo Colorado Apartments, a 391-unit complex set atop the Paseo Colorado shopping center in Pasadena, have been purchased for $98 million by a subsidiary of MetLife Inc.

SSR Realty Advisors Inc. bought the luxury apartments from a joint venture of Post Properties Inc. and the New York State Common Retirement Fund. The apartments were part of a major makeover of an aging mall on Colorado Boulevard east of Old Pasadena that was completed by Trizec Properties Inc. in 2001.

The rental units were built above the stores and share an underground garage with the mall. They were completed about a year ago by Post Properties, an Atlanta-based developer of upscale apartments.

The new owners don't plan many changes, other than to rename the residential complex the Terraces at Paseo Colorado and step up leasing efforts, said Dale Gruen, senior portfolio manager for SSR Realty. More than 20% of the units are vacant, he said. Rents range from $1,400 to $3,000 a month and the complex includes a fitness center, pool and eight outdoor courtyards with gas grills, fireplaces and fountains.

Morristown, N.J.-based investment advisor SSR Realty has targeted the Los Angeles region for apartment acquisitions because of its diverse economy, shortage of affordable homes and landlord-friendly balance of supply and demand, Gruen said. The company bought the Arpeggio apartments in Pasadena last year and also owns other large rental complexes, including Renaissance Tower in downtown Los Angeles and the Sea Castle in Santa Monica.

At about $250,000 per unit, the Post Paseo apartment sale is perhaps the biggest in Pasadena since the Alexan CityPlace apartments sold for $264,000 a unit last year, said Kevin Hurley, an apartment broker at Marcus & Millichap. Those two properties are new and upscale, he said, which makes them difficult to compare with other properties in the area south of the 210 Freeway that typically sell for about $125,000 to $170,000 a unit.

Large institutional investors such as those who work with SSR Realty tend to favor large, new luxury projects, Hurley said.

Post Properties said it will use its $75-million share of the proceeds from the sale to repay debt. The sale of Post Paseo Colorado, along with the disposition this year of Post Park in Atlanta, Post West Avenue Lofts in Austin, Texas, and two land parcels, brings Post's year-to-date net proceeds from asset sales to about $170 million.

Since launching a self-funding effort in early 2000, Post has sold 28 properties, exited three markets, disposed of noncore commercial properties and raised more than $700 million to fund development, buy back stock and cut debt, the firm said.

Trizec sold the retail portion of Paseo Colorado this year for $113.5 million to Developers Diversified Realty Corp. and Lehman Bros. Real Estate Partners.

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