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$118M Deal In Irvine Highlights Demand For Orange County Multifamily Properties

Large multifamily properties for sale in Orange County are hard to come by, so when an attractive, Class-A building becomes available, it is gobbled up pretty quickly, CBRE Executive Vice President Stewart Weston said.

Fusion Apartments in Irvine, Calif.

Weston, along with his colleagues Dean Zander, John Montakab and Paul Berry, recently represented Texas-based Olympus Property in the acquisition of the 280-unit Fusion Apartments in Irvine for $118.5M. The CBRE team also represented the seller, Georgia-based 360 Residential.

The deal, one of the largest multifamily sales in Orange County this year, highlights the current demand for multifamily properties in the region. Only nine properties with 100 units or more have traded this year, Weston said.

“There is no shortage of capital trying to chase Orange County,” Weston said. “Anything coming into the market in Orange County gets a really good look.”

The factors driving demand for multifamily properties in Orange County will be part of the discussion at Bisnow’s Orange County Multifamily event Dec. 18.

With a population of 3.2 million people, Orange County is known for its coastal cities, such as Newport Beach, Huntington Beach and Laguna Beach, tourist attractions including Disneyland and Knott’s Berry Farm and cities like Irvine, a major job hub.

CBRE Executive Vice President Stewart Weston

In the next two decades, Orange County is expected to grow by 300,000 new residents, and more than one-third of the current Fortune 500 list has a presence in Orange County.

But development restrictions, resident opposition and high cost of residential housing in the region make multifamily properties tough to build, but easy to sell. 

“The Orange County market is very robust,” Weston said. “We’re seeing 3.5% to 4% vacancy.”

Built in 2018, the Fusion Apartments is a five-story, 225K SF apartment community that sits on 3.5 acres at 17321 Murphy Ave. in Irvine. The property features two courtyards, a zen garden, koi pond, a rooftop deck, a clubhouse and fitness center.

Irvine is one of the most sought-after submarkets in Orange County. Known as one of the safest places to live in the nation, according to the FBI, the city is also a major tech and job hub. Average multifamily occupancy in the city is 95.4% and rent growth has averaged 4.89%, according to CBRE

"The demographics are superb," Weston said. "You are in the middle of $150K-a-year average earners. This is a thinly traded market. Although there has been some new construction coming, the market does not trade that often." 

Weston said he expects the Orange County multifamily market to continue to grow in demand. Despite some warnings of a recession or a slowdown ahead, there are still investors willing to pour money in multifamily communities in Orange County, he said. There could be a correction, but "it'll be repricing as interest rates go up."

"Street by street, block by block, you can't paint a broad brush in everything," he said. "There is so much liquidity."

"It's robust," he said of Orange County. "There is so much interest in the market. Products that are available for sale will garner a lot of interest."

Learn more about what is driving the Orange County multifamily market at Bisnow’s Orange County Multifamily event Dec. 18 at Greenberg Traurig's offices in Irvine.