If investors in multi-family properties needed another sign to further underscore the continuing strength of the Orange County multi-family investment market, they need look no further than the recent record-setting sale of six townhome apartments in Costa Mesa, officials with Colliers International have reported.

Located at 175 East 21st Street and built in 1976, the upscale and completely renovated property sold for $571,667 per unit, a record for commercial multi-family assets sold in Costa Mesa, California. The sale commanded a capitalization rate of 4.27 percent with a Gross Rent Multiplier (GRM) of 17. The property was sold for a total consideration of $3.4 million, following a comprehensive marketing campaign by Irvine-based Colliers Senior Vice President Patrick Swanson and Senior Associate Brett Bayless, who represented the private investor seller.

“The extraordinary interest that we saw in this property was due to the high quality of the asset, and its exceptional location,” said Swanson. “A large amount of investors are targeting turnkey apartments in Class A markets such as east Costa Mesa, due to their high barriers to entry and imbalances between the cost of home ownership versus the option of renting an apartment.”

“That’s why there has been such a flurry of investor interest in finding investment-grade multi-family units,” Swanson added, “and such a shortage of supply of investment-grade multi-family properties.”

Added Bayless, “Another reason this property attracted multiple investor offers was the fact that it was given a complete make-over in 2015. Each of the six, three-bedroom, two-bath town home units include patios, washer/dryer hookups, and attached garages. Every item that can give this property a competitive edge has been thoughtfully included.

“The upgrades were top shelf and extensive throughout,” Bayless said, “and include such features as quartz kitchen counter tops, Shaker cabinets, high-end vinyl plank flooring, and tankless water heaters.”

According to both Swanson and Bayless, demand and desire for quality apartments remains strong as the undeniable fact remains that the barriers to homeownership, especially in Orange County, remain too high for many young families and other young people.

“Investors are keenly aware of this and know that these families, will be looking for quality, well-located, secure apartments,” added Swanson.