A 127-unit multifamily asset in Long Beach has sold for $51M, a sign that the city’s rental housing market outside of its downtown corridor is coming up, Stepp Commercial principal Robert Stepp said.

Stepp represented the seller, a Long Beach-based private investor, and buyer, HFH Ltd., in the sale of Patio Gardens, an apartment community at 4874 East Los Coyotes Diagonal.

Stepp received 13 offers for the property, he said.

In 2016, the undisclosed private investor had purchased the building for $35.3M.

“This location is a great area. It’s next to Cal State [University] Long Beach and there are plenty of commercial developments happening in this Traffic Circle area,” Stepp said.

He said HFH plans to reinvest and renovate the 5-acre property and modernize the buildings.

Earlier this year, when the debate over the Costa-Hawkins Rental Housing Act that limits rent control was escalating statewide, Long Beach saw a decline in the number of multifamily assets being acquired in the market.

Long Beach rent control advocates did not gather enough signatures to place it on the city’s November ballot.

Stepp said there were some hesitations from the investment community about acquiring property in the city but he expects those to disappear and expects multifamily acquisitions to soon pick up.

The Long Beach market is robust and coming up, he said, referring to developments such as the 2nd and PCH shopping center and other projects.

“We did see some slowdown but we expect things to pick up,” he said. “I think with all of the developments going on in downtown Long Beach and other parts of the city, things are going to look different. I’m excited for the future of Long Beach.”

CORRECTION, JULY 24, 2:25 P.M. PT: An earlier version of this story had the buyer and seller wrong. HFH Ltd. bought Patio Gardens from a private investor. The story has been updated.