Former NYC Mayor Michael Bloomberg made micro design a competition; young Chicagoans are embracing micro's affordable functionality; and the niche asset class has even gained traction in splashy LA. (Soon you'll be able to stack a bunch of milk crates in the park and sell it as an apartment building.)
LA-based Vista Investment Group just sold WhitleyHouse—a 100-dwelling apartment building with micro-units in Hollywood—to a private investor for nearly $14.8M in an off-market sale. As a fairly new asset class, “a lot of buyers and the general market have yet to completely get their arms around it,” president Jonathan Barach (snapped with his wife Sunny and daughter Maya) tells us. The 95%-occupied WhitleyHouse is the firm’s first full turnaround (it bought in a lender-facilitated short sale in 2010) and exit of a micro-unit project (it still owns other buildings that contain micro-units).
Averaging 250 SF, the 70 micro-units rent for about $900/month. The remaining 30 are junior one-bedrooms averaging 500 SF. While space or a full kitchen aren’t priorities of its targeted young tenants, amenities like Wi-Fi are. (A Pilates studio downstairs and a hospital for Apple products can’t hurt.) And that targeted tenant, no matter the city, seems to embrace the urban migration trend and its space sacrifices. For LA, that means film or art students, actors, other movie industry folks, and new media employees, Jonathan says. Though up-and-coming in a different way, other markets well positioned for the tiny trend include North Dakota and its oil boom, Seattle techies, and Austin’s hip singles.
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