Buyer Drops More Than $135 Million on Apartment in Westlake District Amid Neighborhood Revitalization
By Jack Witthaus
CoStar News
June 16, 2022 | 3:26 P.M.
What could be the priciest apartment trade so far this year in Los Angeles was not in tony Bel Air or trendy Silver Lake. It was in Westlake.
That may come as a surprise, given the district's gritty reputation and history of overcrowding, underinvestment and lack of resources. The Los Angeles Times once went so far in 2017 as to call the entire neighborhood "blighted," prompting rebuttals from neighborhood residents. Much has changed in recent years, and Westlake has been undergoing a revitalization, as investors start to see opportunity in the neighborhood's strategic location in the city and its emerging bar and restaurant scene.
San Francisco-based Stockbridge bought the recently constructed, 200-unit Alexan Bahay at 330 N. Westlake Ave. for nearly $138 million, or about $688,000 a unit, according to CoStar data. That's well above the Westlake market average of $270,000 per unit, according to CoStar data. The seller of the property was Dallas-based Trammell Crow Residential, which developed the property just two years ago.
The property was 93% occupied at the time of sale, according to CoStar data. It's roughly five minutes from downtown and seven minutes from Hollywood, making the Alexan Bahay close to the area's major employment centers, according to a statement by the buyer.
The property features studio, one-bedroom and two-bedroom units as well as a lounge, fitness studio, pool, coworking space and outdoor areas. In addition, the property has roughly 24,000 square feet of ground-floor retail, including a Target.
It's the largest total price paid for an apartment property in the city of Los Angeles this year and the sixth-largest in greater Los Angeles, according to CoStar data.
“In addition to its strategic location within a supply constrained market, the superior quality of the asset, surrounding walkability and strong market fundamentals position the property for tremendous growth and long-term success,” Stockbridge Managing Director Mark Carlson said in the statement. The pricing is unusual in a neighborhood not known for luxury apartments and attractive amenities, where the median household income is an estimated $36,496 a year, nearly 60% lower than the national average. In fact, the market's average asking monthly rent is $1,461 per unit, well below the greater L.A. average of $2,161 and far below Alexan Bahay's average of $3,144, according to CoStar data. However, Westlake's proximity to downtown Los Angeles and trendy neighborhoods such as Echo Park is starting to lure investor interest, according to CoStar data. Roughly two-thirds of Westlake apartments have one- and two-star ratings, and high-end multifamily construction there was practically nonexistent before 2010.
These days, however, the data shows there are roughly 830 apartment units under construction in the neighborhood, much of that higher-end than the previous stock.