- September 22, 2016
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Digested from “TruAmerica Makes Bet on Upgrading Southern California Apartments”
The Wall Street Journal (1/27/15) Taves, Max
TruAmerica Multifamily is taking a different investment approach in the popular multifamily property market: Rather than buying Class A properties in prime locations, it’s snatching up Class B properties in less popular areas. Its goal is to renovate the apartment buildings, giving them a “Class A feel” that will fetch higher rents.
Its most recent $482 million purchase of 14 units built in the 1980s in less affluent Southern California neighborhoods such as Santa Clarita and San Pedro highlights this strategy. The company expects to spend around $40 million to modernize the nearly 2,700 units and common areas to give them upscale appeal.
Some disagree with the strategy, noting that the updates could oversaturate the Class A property supply at a time when Southern California’s economic growth is already threatened by an unaffordable housing market. But others argue the principal investment will remain solid.
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