Decron Properties has acquired Hangar at Thunderbird (Hangar), a 266-unit gated luxury multifamily community located in Glendale, AZ for $69 million.

The acquisition was the upleg of a 1031 exchange following the firm’s successful disposition of two older properties in Ventura County, CA, 60 miles west of downtown Los Angeles.  The 1031 Exchange is an example of Decron’s ongoing strategy to geographically diversify its 10,000-unit multifamily portfolio with newer assets not restricted by city or statewide rent control.

Decron acquired Hangar for $260,000 a unit, far below the average cost of $350,000 a unit that buyers were paying at height of the market in 2021-2022 according to Decron CEO David J Nagel.

“Hangar was an opportunity to acquire Class A property in a submarket with an attractive demographic base and strong renter pool at a price well below replacement,” Nagel said. “And with only one apartment community under construction within a 3-mile radius and with the current rent structure at Hangar below market, we believe the property offers substantial opportunity for growth, and feel it is a tremendous addition to our local portfolio.” 

Since 2018, Decron has invested more than $1.1 billion in institutional quality assets with an average year built of 2014, primarily in Arizona and Washington State. Hangar is the firm’s 10^th investment in Arizona in the last three years, bringing its unit count to approximately 2,500.  

Completed in 2023 by the seller, P. B. Bell, Hangar is a modern garden-style community offering a mix of one- two- and three-bedroom apartment homes housed in 19 low-rise residential building on a large 20-acre site.  Each apartment home offers premium features including chef style kitchens, custom cabinetry, stone countertops and large walk-in closets.  Common area amenities include a resort-style pool with poolside gaming tables, fitness center, children’s playground, EV charging stations and pet park. 

Located at 15301 N. 57^th Avenue, Hangar is adjacent to the Loop 101 giving residents access to multiple employment hubs across Glendale and Phoenix, including Deer Valley & Interstate 17 (I-17) Employment Corridor, home to such Fortune 500 companies as Well Fargo, Honeywell, United Health Group, Discover Financial Services, USAA, and FedEx.

“Because of a lack of developable land, and high construction costs, the area has only seen the construction of two market rate multifamily assets with 100 units or more since 2010, we feel extremely confident in Hangar’s long-term upside,” Nagel said.  

Decron Properties has sold Ranch at Moorpark, a 376-unit multifamily community in Moorpark, CA to AEW Capital Management for $133.2 million.

Decron acquired the asset located at 51 Majestic Court in the Ventura County community 50 miles west of downtown Los Angeles in 2013 for $84,430,000. During its hold period Decron completed a significant capital improvement program that included the complete renovation of all unit interiors, the expansion of covered parking options allowing for a 2-car garage for their 2-bedroom units and a expansive renovation to all the common areas.

Common Area renovations included a new recreation building that generated a new rental office and provided a Fitness Center, Yoga/Spin studio and a resident clubhouse with chef’s kitchen. Additional improvements generated a children’s play area, dog park and poolside barbeque and dining areas. The pool area was updated to include outdoor social areas including fire pits and expanded seating areas.

“The execution of our business plan produced a high-quality community with more amenities than its competition. This plan generated substantially higher rents and in turn robust returns over a 10-year period, outperforming our original projection,” said Decron CEO David J. Nagel. “Ranch at Moorpark is a large, well-located asset that still offers additional upside for an experienced operator like AEW Capital Management in a Ventura County market that is still seeing rent growth.”

The sale of Ranch at Moorpark is the latest in a series of Southern California dispositions that Los Angeles-based Decron has made over the past 6 months.

“We’re looking at markets like San Diego, where we recently made a substantial acquisition, and places like Phoenix and Seattle where we already have created a significant portfolio,” Nagel said. “Our objective is to make our portfolio younger and geographically more diverse.”

Decron Properties has acquired Margo at The Society, a 240-unit, luxury multifamily community located just off Hotel Circle in San Diego, CA for $125.5 million.

This is Decron’s second acquisition in the San Diego market but its first since 2015 when they acquired The Avenue at Carlsbad, a 450-unit apartment complex in Carlsbad, CA, for $112 million. The Los Angeles-based real estate investment, development and management firm is looking to acquire 500 - 1,000 additional units in San Diego County over the course of the next 24 months.

The acquisition was fueled through a 1031 exchange with Decron selling two properties in Thousand Oaks, CA, Los Robles Apartments for $102.5 million and Retreat at Thousand Oaks for $69 million and reinvesting a portion of those funds into Margo at the Society. Decron continues to seek other trades to complete the Thousand Oaks exchange and in addition, Decron has several other dispositions scheduled to close in the next few weeks. It is all part of Decron’s ongoing strategy to make its portfolio younger and geographically more diverse while reducing the firm’s exposure to assets that are restricted by city or statewide rent control.

Legislation changes continue to concern Decron with its older California assets and purchasing new properties in California or out of state is a way to reduce its exposure from new legislative ballot measures, such as the No Justice for Renter Act that would repeal landlord protections currently available under Costa Hawkins.

Located at 201 Del Sol Drive, Margo at The Society is part of a mixed-use development that includes four multifamily communities, surrounded by a variety of hotel, retail, restaurant, and entertainment options, all within walking distance of the property including the 1.7 million-square-foot Fashion Valley Shopping Center. Margo is also a five-minute walk to the Fashion Valley Trolley Station and Transit Center which provides intermodal commuter access throughout San Diego, including Downtown La Jolla and San Diego State University and University of California San Diego. 

Opened in 2022, Margo at the Society is comprised of one-, two- and three-bedroom floor plans. Residences feature quartz countertops, stainless steel appliances, designer backsplash, soft close cabinets and drawers, keyless entry, and Nest thermostat systems. Community amenities include a resort-style pool area, a state-of-the-art fitness center and common area lounges and meeting rooms.

The property sits adjacent to the 8 freeway in Mission Valley, in one of the most coveted submarkets in San Diego. With just seven existing class-A communities in the area, the demand for upscale housing in this submarket has exceeded the available supply, with approximately 1,562 units of new construction absorbed since 2021.

“Unlike most markets in California, San Diego continues to experience remarkable growth, powered by a surging presence from the tech, healthcare and biotech industries establishing a growing presence in the area,” said David Nagel, Decron’s Chief Executive Officer. “The property’s stellar location, combined with the ongoing need for high-quality, multifamily assets to meet the demand of a growing population, made this an ideal opportunity for Decron.”

Decron Properties has acquired The Wyatt, a 216-unit garden-style apartment community in the Phoenix submarket of Gilbert, AZ, for $91 million. It is the ninth acquisition for Decron in the Phoenix metro overall and seventh in the Southeast Valley. The Los Angeles-based real estate investment firm has acquired over $800 million of real estate in the greater Phoenix market in the last 15 months.

Completed earlier in 2022, The Wyatt offers a mix of one-, two-and three-bedroom floor plans averaging 980 square feet. Units feature open-concept floor plans with nine-foot ceilings, stainless steel appliances, granite kitchen island countertops, wood-style vinyl plank flooring and full-sized washer/dryers. The community features condominium-quality interior finishes and abundant community amenities, including a resort-style pool and spa, outdoor grilling and gaming area, state-of-the-art fitness center, and dog park and washing station.

Decron will leverage its extensive property management experience in the market to help with the process of stabilizing the new property, which at 65 percent occupancy is in the middle of lease-up. Given the velocity of leasing activity since its opening, Decron expects to be able to stabilize at 95% occupancy in the next four months.

In the highly competitive Phoenix multifamily market, Decron was able to secure the asset in part because of its certainty of execution and a deep-seated relationship with Citibank.

“We have demonstrated throughout our history an ability to successfully close on deals and that reputation has helped us develop strong relationships with brokers and property owners within the markets we are in,” said Decron CEO David Nagel. “Strong relationships, including a phenomenal one with Citibank, have allowed us to successfully acquire assets like The Wyatt in competitive markets and under challenging conditions like the high-interest economy we are currently experiencing.”

In the past year, Phoenix had the third largest rent growth among the top 10 U.S. markets while experiencing population growth of 1.3%, placing it among the fastest growing metros in the country. Newcomers continue to be drawn to the market’s affordability, job opportunities and attractive lifestyle. A large imbalance between multifamily supply and demand continues, which should create on-going growth in the future.

Renters are drawn to the Southeast Valley submarket because of its highly rated schools, suburban lifestyle and easy commute to nearby job centers. Gilbert's population has increased by nearly 20% since 2010, one of the fastest growth rates within the Phoenix MSA. Major employers include GoDaddy Software, Banner Health and Dignity Health. Deloitte recently established a tech hub that will employ up to 2,500 high-wage workers just four miles south of the The Wyatt.

“Having a large inventory of properties in the Southeast Valley has created synergy between each of those properties and enables us to be able to feed leasing traffic from one project to another,” added Decron CFO Daniel Nagel. “Even with the phenomenal interest in the market over the last several years, we believe there is plenty of runway left and continue to explore options to increase our footprint within the Southeast Valley and throughout Phoenix.”

With its acquisition of The Wyatt, Decron’s unit count in the Phoenix MSA rises to 2300 and its entire portfolio has increased to approximately 10,000 units. 

Los Angeles, CA (Nov. 15, 2018) —Decron Properties has acquired Willow Creek, a 208-unit multifamily community in San Jose, CA for $84.6 million, increasing its annual investment activity for the year to a record $345 million.

Decron's other 2018 acquisitions include Bridgecourt, a 220-unit mixed-use community with apartments and ground floor retail in Emeryville, CA, which closed in January, and its $173 million acquisition of Avana 522 in Seattle, WA last month, the largest single investment in Decron's history.

Decron has created a substantial footprint in Northern California since entering the multifamily market three years ago. With Willow Creek, the Los Angeles-based diversified real estate firm's local portfolio now totals five properties and 858 units.

"The Northern California multifamily investment market is extremely competitive and the opportunities to acquire an asset like Willow Creek, that fit our investment strategy, are difficult to find," said Decron Chief Financial Officer Daniel Nagel. "We will continue to be active, but patient in the market, as we continue to look for the right kind of assets."

Built in 1985, Willow Creek consists of a mix of one- and two-bedroom floor plans. All units include full-size washer and dryer, central heating and air conditioning, walk-in closets, patio or balcony, and enclosed garages or covered parking. The common areas include two resort-style pools and spas with poolside Wi-Fi access, a health and fitness center, lighted tennis court, a children's play area and landscaped courtyards.

Willow Creek represents an exceptional value-add opportunity. Decron plans to undertake a significant capital improvement program, which will include upgrading unit interiors. Common area improvements will include renovating pool areas, the fitness center, as well as new landscaping and exterior paint to enhance the curb appeal of the property.

The property is located in the neighborhood of Willow Glen, a short walk from the Fruitdale VTA light rail station. This puts residents less than a 10-minute train ride away from Google's proposed eight-million square-foot downtown San Jose Campus.

"As a long-term investor, the proposed Google campus was another compelling reason for us and our investors to acquire this well-located property with long-term upside," said David Nagel President and CEO of Decron Properties.

Decron was also attracted to this property because of its BMR component. The property operates under a Regulatory Agreement that requires 20 percent (42 units) of the community to be rented at (BMR) below market rents to tenants with household incomes at or below 60 percent of the Area Median Income.

"These units always will be in high demand, which will allow overall occupancy at the property to exceed market rate averages and help to generate strong and stable cash flows," added Nagel.

Salvatore Saglimbeni, along with Stanford Jones, and Philip Saglimbeni from Institutional Property Advisors' (IPA) Palo Alto office, represented the seller in the transaction.

"The median price for a home in San Jose is more than $860,000, pricing many residents out of the for-sale housing market and resulting in tremendous demand for quality rental housing like Willow Creek," said Saglimbeni, IPA's senior managing director.

Los Angeles, CA (November 5, 2018) — In one of the largest multifamily transactions in Seattle this year, Decron Properties has acquired Avana 522 (Avana), a 558-unit multifamily property in Bothell, WA for $173 million. The transaction marks the Los Angeles-based real estate firm’s entry into the Pacific Northwest real estate market.

The low-density 56-acre community was built in 1988 and expanded in 1999. Avana’s high unit count allows Decron, which owns close to 7,500 apartment units in California, to immediately enter the Seattle market with scale through a single acquisition and paves the way for additional investments in the Seattle MSA. Decron plans to invest approximately $400 million in the Seattle market over the next 36 months according to Daniel Nagel, Decron’s Chief Financial Officer.

“Seattle and its submarkets are a significant job creator market that benefits from a cluster of major employers with long-term growth prospects,” Nagel said. “In addition, our concerns about the current regulatory environment in California heightened our focus on investing outside of our home state. Avana is the result of several years of due diligence by our investment team to understand the nuances of the market.”

With immediate access to Highway 522 and Interstate 405, residents are within 20 miles of some of the area’s largest employers, including the Microsoft headquarters in Redmond, Boeing’s headquarters in Everett, and companies like Google, Facebook, and Amazon which have offices in Kirkland, Redmond, and Bellevue. The property is also located near two large business parks in Bothell, the North Creek Business Park and Canyon Park, which include tenants such as Google, AT&T, T-Mobile, and Philips Medical Systems.

An easy commute to hundreds of thousands of jobs and one of the best school systems in the state, Bothell has become one of the top apartment submarkets in Greater Seattle, attracting both millennials and dual income families. Current submarket occupancy is 94.7 percent and is projected to remain strong through the next several years, according to CoStar.

Decron is one of the largest privately owned real estate firms in California with 2017 revenues of $190 million. From ground up development to value-add/rehab to asset repositioning, Decron’s investment strategy focuses on opportunities that are supported by long term growth drivers, specifically job creation, supply and demand imbalance, and strong public school systems. The discipline to focus on these three metrics has been a major contributing factor to Decron’s success in California. This same focus is the motivation behind Decron’s entry into the Seattle MSA.  

The garden-style community features a mix of one, two- and three-bedroom units. Avana includes a wide variety of amenities including two outdoor pools and one indoor pool, two clubhouses and two fitness centers, four playgrounds, indoor and outdoor basketball courts, tennis courts, picnic and barbecue areas, two pet parks and an indoor movie theater.

Decron will undertake a significant capital improvement program, including upgrading all unit interiors including upgraded stainless steel appliances, new kitchen cabinet doors and quartz countertops, and upgraded plumbing and electrical fixtures. The common community areas will also be upgraded, with the renovation of the club houses and pool areas, adding fire pits, new playground equipment, as well as modernizing the two dog parks. The company also plans to expand the capacity of the package locker facility.

Frank Bosl, Eli Hanecek, and Jon Hallgrimson from CBRE’s Seattle office represented the seller in the transaction.