Micro Units, Big Demand
More proof that tiny is taking over. LA-based Vista Investment Group sold WhitleyHouse, a 100-dwelling “micro-unit” apartment building, to a private investor for just under $14.8M in an off-market sale. President Jonathan Barach (with wife Sunny and daughter Maya) told us yesterday that “It’s a fairly new asset class, and a lot of the buyers and general market have yet to completely get their arms around it.” While Vista owns other buildings that contain micro-units, the 95%-occupied WhitleyHouse (which the company spells WHITLEYhouse, in case you're looking to add it to your fantasy real estate team) is "the first where we've done the full turnaround and exit."
The project's 70 micro-units average 250 SF and rent for about $900/month. The rest are junior one-bedrooms averaging 500 SF. According to Jonathan, most of the tenants are film or art students, actors and others who work in the movie industry, and local service and new media employees. The concept plays off the urban migration trend, he says. The location in an up-and-coming part of Hollywood along Cahuenga, where new restaurants and nightlife are attracting the younger demographic, was a big factor. The building itself boasts commercial tenants such as a Pilates studio, a store that sells and fixes Apple products (the modern day hospital), and a number of boutiques.
WhitleyHouse originally was built as a hotel and later converted to "hotel light housekeeping,” a multifamily designation. Vista acquired the property, previously called Chateau Hollywood, in a lender-facilitated short sale in 2010 and began renovation. "The majority of the tenants don't do a lot of cooking, so we kept the kitchen to a minimum." (Hopefully tenants' moms don't read this.) The rest of the project involved things like renovating the ground-floor retail space, redoing the lobby, and adding WiFi throughout. Madison Partners' Darin Beebower repped both sides in the sale, with Sklar Kirsh's Andrew Kirsh serving as Vista's attorney.