Western National Nabs 496-Unit Suburban LA M-F for $100M

By Barbra Murray, Contributing Editor

Western National Realty Advisors wraps up acquisitions under its $200 million Western National Realty Fund II L.P., with the purchase of Ironwood and Fairway Palms, a sprawling 496-unit apartment compound in the suburban Los Angeles town of Rancho Cucamonga. Fund II shelled out approximately $101 million for the asset, taking it off the hands of JP Morgan.

Snapping up a relatively new, premier apartment community with an occupancy level of 95 percent is no simple feat in the current market. “Acquiring this type of product is a very competitive process with cap rates being compressed for Class A real estate,” Jerry LaPointe, vice president of Western National Realty, told Commercial Property Executive. “There is also a tremendous amount of capital wanting to be in the multi-family space, especially for Class A product.”

In addition to the high-tenancy level and top-notch quality, investors were undoubtedly drawn to the location. Sited roughly 40 miles east of Los Angeles and north of Orange County, the decade-old property occupies 23 acres saddled between the 1.7 million-square-foot Ontario Mills Mall and the Arnold Palmer-designed Empire Lakes Golf Course.

Now, with Western National Realty as owner, Ironwood and Fairway Palms, which consist of 12 three-story structures and 11 three-story buildings, respectively, will operate as one community under the management of Western National Property Management, a sister division in the Western National Group family.

With the completion of Fund II’s purchasing and development program, the road is paved for Western National Realty’s next private equity investment vehicle. “Fund III is still being finalized, and at this point the amount is undetermined,” LaPointe said. “Fund III will have a focus similar to Fund II, with a mixture of acquisitions and developments in markets we believe have the best opportunities for positive growth.” Under Fund II, those markets included areas of Southern California, Colorado and Utah.