2339 Abbot Kinney Blvd, Venice

the very successful sale of 2339 Abbot Kinney Blvd located in Venice, California.

Property Overview

The LAAA Team of Marcus and Millichap is proud to announce the successful sale of 2339 Abbot Kinney Blvd, a rare triplex opportunity in the heart of Venice, CA, just 0.75 miles from Venice Beach and steps from local shops, restaurants, and entertainment that the world-famous Abbot Kinney Blvd has to offer. This 3-unit, 1,792 SqFt multifamily building sits on a 4,858 SqFt lot, and it has a good unit mix of (2) 1-Bed / 1-Bath units and (1) 2- Bed / 1-Bath unit.

Deal Story

This was a tough one and took a good amount of time to get to the finish line. We originally listed this property May 2021 and we came to market at $1,995,000. In order to cast the widest net, we were marketing the property as an investment, as an owner occupied property, and also as a redevelopment play so that we could reach all different types of buyers. We had recently worked on a few development sites in Venice and saw that there was good demand, but we quickly realized that the property's tenants and the COVID moratorium on evictions would probably make it hard for a developer to buy this. From an investment standpoint, the main challenge was our original list price was under a 3% CAP rate due to the low paying, rent controlled tenants. The CAP rate combined with a very high $1,113 per square foot made this difficult to sell to a normal investor.

Fast forward 6 months into our marketing and we were seeing new difficulties with the steady rising of interest rates. Most owners in LA are in the same rent controlled situation (with approximately 79% of all units in LA under RSO) and they cannot raise rents until 2023. With interest rates going higher and higher each week, and rents staying flat (if you're even collecting rents), a Buyer needs to offer a lower price in order to maintain the yield they would have if they financed the property with a lower rate a few months prior. For any clients out there who are considering selling their property, we would advise you to take a look at the value of the property today because rising interest rates will no doubt put downward pressure on values.

In the end, we were able to find a very qualified buyer that loved the location and had a long term vision for the property, overlooking the currently low rents. The buyer closed with a bridge loan and only put down 15% in order to keep more cash on hand. With the cash saved on the down payment,...