Southern California Investors strike gold in Central Valley housing market

TULARE COUNTY – High-end rental complexes in the Central Valley proved to be a gold mine for Southern California investors, as the Mogharebi Group brokered the sale of yet another major housing community this year.

The Mogharebi Group (TMG) brokered Oak View Apartments, a 237-unit garden-style multifamily community in Visalia, Calif., once again, but this time for $50 million. This is one of the largest multifamily transactions ever in Visalia, according to TMG executive vice president Otto Ozen. The new buyer plans to upgrade 173 units of the Oak View Apartments. Built on a 16.46-acre site in 1990, Oak View Apartments is located at 4700 W. Caldwell Avenue in Visalia. While under its previous ownership, those rooms remained unrenovated and only one of the community’s 37 duplexes had been fully renovated.  The property comprises 48 buildings totaling 209,610 rentable square feet. The property features one-, two- and three-bedroom floor plans with an average size of 884 square feet.

Originally, the apartments were purchased by a private investor from Southern California on Nov. 3, 2020, for $42.5 million. However, two years later the property was up for sale again, and the lucky investor that scooped up the multifamily complex is also a private investor based out of Los Angeles. TMG specializes in the multifamily property sector throughout California, and this go around, they represented the seller, a private investor from Southern California.

The property also features two outdoor pools and spas, two playgrounds, three laundry centers, business center, fitness center, basketball/volleyball courts and reserved covered parking and garages. The property is adjacent to Linwood Elementary School, La Joya Middle School and is within a 30- to 60-minute commute to over 661,000 jobs.

This is not the first time TMG has helped sell large housing developments in the Central Valley, though. High-end rental complexes in the Valley have caught the attention of many Southern California investors looking to turn big profits on a tight housing market. Operations manager Brian Nakamura has said that many Southern California investors are buying homes within the Valley because it’s a much cheaper price per unit, and there is a much better capitalization rate in the Valley than in larger cities. Since their inception in 2015, TMG has been involved in the sale of more than 6,500 units in the Central Valley with sales exceeding $800 million.

A recent property TMG brokered the sale of was ReNew, a 128-unit development in Visalia from FPA Multifamily to a Santa Barbara-based private investment firm for $30.65 million in April 2022. In 2020 alone, TMG also brokered the sale of a 240-unit apartment complex in Bakersfield for $22 million, the sale of a 109-unit complex in Tulare for $15.66 million and a 237-unit complex in Visalia for $42.5 million.

In the last two years, 445 multifamily properties in the Central Valley have traded hands, 10% of those transactions brokered by TMG. Over that span, the average sales price per unit increased 21%.  The greatest increases could be found in 4- and 5-star properties which increased 28%.

There are plenty more in the permitting pipeline, as well. Apartment permits in Visalia were up 30% in the first two months of 2022 alone. Permits in Tulare are estimated to skyrocket as they are often priced lower than similar sized homes in Visalia, and the same can be said of apartment complexes as well.

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