Universe Holdings has made its entry into the Florida real estate market with the acquisition of Pearce at Pavilion, a 250-unit multifamily property in Tampa, FL for $66 million.  The acquisition included the assumption of Fannie Mae loan at a 4.13 percent interest with several years remaining on term, at 47% LTV.

Completed in 2016, Pearce at Pavilion’s high unit count allows Universe, which has transacted more than 7,500 apartment units throughout California and New Jersey, to immediately build scale and paves the way for additional investments in Tampa and throughout Florida. Universe plans to acquire more large complexes in Florida over the next 12 to 24 months according to Universe CEO Henry Manoucheri.

“Entering the market with the acquisition of Pearce at Pavilion is quite an accomplishment for us and demonstrates our ongoing commitment to build an East Coast portfolio that will be on par with our holdings in Southern California in a relatively short period of time,” said Manoucheri.  “Like the other markets where we have invested, Florida is benefiting from a growing economy fueled by an expanding population that is migrating from more expensive cost-of-living markets as well as a legislature that is business friendly, no state tax, and fantastic demographics with growth, which is all very attractive.”

Universe’s entry into the market is the result of more than three years of research and due diligence. This included knowledge gained by Manoucheri backing his two sons Avi and Aaron with their investment in nine multifamily communities throughout Florida including Ft. Lauderdale, Bradenton, Daytona Beach and Fort Myers.  Avi and Yosef Manoucheri’s insight in moving to Miami three years ago, along with Aaron’s keen sense of deal flow, strongly enabled the family to focus nationally.  

Pearce at Pavilion is a Class A apartment community offering one- and two-bedroom floor plans featuring top-of-the-line interior finishes that include gourmet kitchens, granite countertops, Whirlpool stainless steel appliances, wood-style flooring, and in-suite full-sized washers and dryers. The property also features extensive indoor and outdoor amenities, including a resort-style pool and spa, poolside covered seating, clubhouse with coffee bar, Wi-Fi Café with business center, multimedia game room, state-of-the-art fitness center, Luxer One package room and a fenced dog park.

Pearce at Pavilion benefits from numerous demand drivers. Located at 3603 Pavilion Circle in Hillsborough County, the #2 relocation destination in the United States, due to its extensive variety of local amenities, superior schools and high quality of life. It is also seven miles from Downtown Tampa, one of Florida’s major job hubs that serve as the headquarters for five Fortune 500 Companies.  Additionally, Forbes Magazine recently ranked Tampa as the No. 1 emerging tech city in the country.

“Our objective in Florida is to continue to fortify the Universe Living Brand with strategic acquisitions in strong multifamily markets that offer the kind of value and long-term growth that Universe has been built on,” Manoucheri said.

Universe Holdings has acquired the Stonegate Apartments (Stonegate), a 160-unit multifamily community in Southern California’s Inland Empire, in an off-market transaction worth $53.370 million.

Built in 1987, Stonegate offers a mix of one- and two-bedroom floorplans and a strong amenity package, including a fitness center, swimming pool, spa, barbecue area, pet park, playground, covered parking, four laundry rooms and a business center. The property’s location at 6506 Doolittle Ave. in west Riverside gives residents access to five major freeways (60, 91, 10, 15, 215) that connect the area to the Inland Empire’s more than 1.9 million jobs, as well as Los Angeles and Orange counties.

Stonegate represented an opportunity for Universe to acquire a stabilized asset with the ability to add value by upgrading a portion of units that are outdated.. The Los Angeles-based real estate investment firm plans to invest $100 million in the market over the next 24 to 36 months, according to Universe Founder and CEO Henry Manoucheri.

“We see significant opportunities across the Inland Empire and plan to aggressively pursue acquisitions to further grow economies of scale and establish a foothold in the market,” said Manoucheri, whose firm cultivated relationships and actively searched the market that spans two counties (San Bernardino and Riverside) for more than a year.

“Stonegate is an exceptional asset that we were able to acquire below replacement cost. We plan to increase value through hands-on property management and an ambitious renovation plan,” he said.

The Inland Empire’s phenomenal growth in population has been fueled by its lower cost of living compared to nearby Los Angeles and Orange County markets and rising demand for warehouse workers needed to meet the employment demand created by the continuing influx of logistics centers. The Inland Empire is one of the most prominent distribution hubs in the Western U.S. with its growing number of e-commerce warehouses helping to fuel the market’s booming economy.

Due to increased construction costs and challenges with the entitlement process, there is a lack of new multifamily development in the market, creating heightened demand from the area’s growing population.

“With its strong population growth, growing job opportunities and affordable cost of living, the Inland Empire checks all the boxes when it comes to demand drivers we look for in a new market,” Manoucheri said. “The market’s relative affordability is one of several key factors that we value in this market.”

IPA represented the seller in the transaction. Senior Managing Director Charles Halladay, Director Jonah Aelyon and Analyst Jolie Zhou from JLL’s San Francisco office obtained the debt for Universe. Universe’s other Inland Empire asset, the 304-unit Acacia Park community located less than 30 minutes from Stonegate in San Bernardino, was acquired in 2003. Universe had previously purchased a third property in the Inland Empire in the early 2000s, a 320-unit multifamily property in Temecula that they sold in 2012.

Universe Holdings has acquired Serena Vista, a 110-unit apartment community in the prime San Diego submarket of La Mesa for $34.45 million.

With the acquisition of Serena Vista, located at 5810 Amaya Drive, Universe increases its footprint in La Mesa to 300 units, which are spread out among four properties. Getting an opportunity to add significant volume to its San Diego portfolio with one acquisition was extremely appealing, according to Universe CEO Henry Manoucheri. 

“Only 14 multifamily properties with more than 100 units were put on the market in the Greater San Diego market over the last 12 months, so the chance to acquire Serena Vista was an opportunity we simply could not pass up,” Manoucheri said. “It’s a challenging market in which to acquire larger properties because they simply don’t change hands that often. With three other properties in La Mesa, we have a good feel for the market, as well as strong operations already in place, which added synergy to this deal.”

Built in 1971, Serena Vista is a fully leased, stabilized asset in an area ranked among the 10 most expensive real estate markets in the country. This has created strong demand for rental properties to accommodate those priced out of homeownership. The area is a hub of major employers, including Kaiser Permanente, Booz Allen Hamilton and the San Diego Union-Tribune. In addition, the military maintains a large presence in San Diego, which serves as a homeport to more than 60 percent of the ships from the U.S. Pacific Fleet and more than one-third of the combat power of the U.S. Marine Corps., resulting in additional demand for rental properties. 

The continuing population growth has forced many would-be renters away from downtown, creating strong market rent growth in submarkets like La Mesa, which is located within 15 miles of several major employment centers. This includes San Diego State University, which is 5.3 miles from the property, making La Mesa a prime spot for both students and those employed by the university to reside.

La Mesa, known as the “Jewel of the Hills,” is located within access to all of San Diego via Interstate 8 and California State Route 125. The Amaya Drive Trolley Center, located within walking distance, offers residents easy access to mass transit lines servicing the region. Known for its quaint downtown, La Mesa is located within 1.5 miles of the Grossmont Shopping Center, a 1.2-million-square-foot regional shopping center.

Serena Vista features one- and two-bedroom apartment homes in  17 low-rise residential buildings on a 5.17 acres site. Property amenities include a swimming pool, spa, two laundry facilities, fitness center, a clubhouse with kitchen area, garages and covered parking with storage. The property has undergone significant interior and exterior upgrades, with Universe planning to institute a light capital improvement plan aimed at upgrading the property’s common areas.

The acquisition of Serena Vista is one of five properties in a  new investment vehicle consisting of small value-add and larger core assets located in Los Angeles and San Diego Counties. 

“Grouping strong stabilized assets like Serena Vista with value-add properties creates diversified investment opportunities for our investors that we feel will lead to superior blended returns,” said Manoucheri.

Universe Holdings has acquired a 15-unit multifamily community in Inglewood, CA, for $3.8 million. 

Chateau Park Casino Royale V is the firm’s ninth acquisition in the past four years in the Los Angeles submarket that has gained national attention as the site of the $3 billion NFL stadium that will be home to both the Los Angeles Rams and Los Angeles Chargers. Universe plans to double its portfolio in Inglewood in 2019.

Universe Holdings CEO Henry Manoucheri identified Inglewood as a strong multifamily market two years before Rams owner Stan Kroenke made his intention clear to make Inglewood the home city for his new stadium complex. Manoucheri’s keen investment instincts, honed by more than 30 years of experience in the Southern California market, led Universe’s investment team to dig deep into the market and the results of its research backed up Manoucheri’s belief.

“A lot of investors shied away from Inglewood, but what we saw was a high-density community with a large inventory of workforce housing in a submarket located adjacent to markets where rising rents are pricing many people out,” Manoucheri said. “We also saw stable occupancy and the opportunity to acquire a number of value-add properties. For us, the size of the properties was not a concern. We have properties ranging in size from 15 to 50 units. We believed in what we were doing and time has proven us right.”

Universe’s acquisition of Chateau Park Casino Royale V is the latest example of a property that fits its investment strategy in Inglewood. Located at 232 W Olive St., the community is situated five minutes away from the redevelopment of Hollywood Park and the new NFL stadium. It is centrally located to local employers like Los Angeles International Airport, Centinela Hospital and the growing tech industry in Silicon Beach.

Built in 1962 and having never been renovated, the property offers an immediate value-add opportunity. Universe Holdings plans to implement a significant capital improvement program to bring the building’s exterior and interior units up to contemporary standards on par with newer product in the market. Universe plans to complete the renovations to coincide with the opening of the new stadium and entertainment complex.

“We take pride in investing millions of dollars in improvements in our properties elevating our tenants experience, lifestyle, and creating jobs in Inglewood,” Manoucheri said. “Our continuing goal is to provide affordable, high quality workforce housing for a community we’re in for the long haul.”

Taking advantage of the rising property values in its approximate 2,500-unit apartment portfolio, Universe Holdings has received $27.65 million in cash-out refinance loans secured by three of its Los Angeles apartment communities.

The two separate loans allowed Universe Holdings to pay off the existing mortgages on the value-add properties; all acquired in 2016. The financing also provided a significant amount of fresh capital to Universe’s balance sheet for future acquisitions. The Los Angeles-based investment firm is targeting approximately $250 million in new acquisitions in 2019. 

“All three properties are all very well located but did not meet the demands of today’s renters when we acquired them.  Many units were in their original condition, some dating back as far as 1961,” said Samuel Landman, who heads investor relations and capital markets for Universe Holdings.  “Following our significant renovation program, we were able to reduce operational costs, and far exceed our original projections for occupancy and rental growth across the three properties.”

Prime Finance provided Universe Holdings with a two-year, $19.35 million floating rate loan to refinance 1229 and 1318 N. Mansfield Avenue in Hollywood. The two separate properties, rebranded as Chateau Mansfield total 68 units and, are located less than one-half block apart near Fountain and and Highland Avenues. 

Universe Holdings also received an $8.3 million loan from Banc of California to refinance 47-unit 702 Venice Way in Inglewood. The 15-year fixed rate financing carries an interest rate of 4.6%, with interest only payments for the first three years of the term. 702 Venice Way is located approximately three miles from the new Los Angeles Stadium and Entertainment District, which is expected to be completed in 2020. 

“We expect to close on several multifamily properties, throughout the Greater Los Angeles area in the next several months,” added Landman.