BRE Properties acquires class A apartment community in Hollywood
BRE Properties has acquired Jefferson at Hollywood for a purchase price of USD120.5m.
The community of 270 apartment homes is located in the resurgent Hollywood sub-market of Los Angeles, California.
Built in 2010, the class A community is in a transit-oriented location in one of California's most dynamic urban sub-markets, across from the Metro Red Line's Highland subway station and one-half mile from the Hollywood Freeway (US Route 101). The community has walking access to the neighbourhood's dining scene, retailers, theatres and Hollywood amenities
The Hollywood sub-market has experienced a significant revitalisation in recent years with an estimated USD4bn of public and private investment, resulting in increasing demand by employers in the entertainment and media industries for office and studio space.
The community was acquired on an unencumbered basis with proceeds from the company's revolving credit facility. In connection with the acquisition, BRE intends to dispose of several slower growth, non-core communities through a reverse like-kind exchange. The exchange is expected to be completed by the first quarter of 2014.
"This transaction is a component of our strategy to improve the company's portfolio quality by disposing of non-core communities and recycling capital into our high-barrier, in-fill development pipeline as well as select acquisitions such as Jefferson at Hollywood," says Constance B Moore, president and chief executive officer.
The Jefferson at Hollywood was acquired at a discount to replacement cost and is expected to generate a first-year net operating income-to-purchase price yield of 4.0 per cent.