Standard Communities has flipped another apartment complex from market-rate to workforce housing.
The L.A.-based developer teamed up with Faring to buy a 230-unit, newly built complex in Hawthorne for $140 million.
Standard and Faring’s deal came out to about $608,695 per unit — considerably more than CIM Group’s recent purchase of a 117-unit complex in the nearby city of Inglewood, which came out to around $446,000 per unit.
The duo bought the complex with the California Statewide Communities Development Authority, a joint powers authority that issues tax-exempt bonds to finance such deals in exchange for guarantees that rents will remain in arange deemed affordable for middle-class tenants over the long-term.
The Dinerstein Companies in Housto sold the property, records show. It bought the development site for $18.2 million in 2018.
Standard Communities and Faring will administer the project and lower rents at the property for qualified residents who make between 80 and 120 percent of the area’s median income. In Hawthorne, in the South Bay section of Los Angeles County, the median household income was $54,215 as recently as 2019, according to census data.
There are no plans to immediately lower rents, Standard Communities said, offering an indicator that current levels are within range of an affordable level by area standards and perhaps the higher price per-unit compared to the Inglewood deal.
Located at 12530 Crenshaw Boulevard, the property includes a range of studio, one-bedroom and two-bedroom units, as well as ground-floor retail and restaurant space. The complex was built in 2021.
Standard and Faring scaled up their joint venture in the workforce housing segment last year, aiming to add at least 4,000 new workforce housing units across California within the next two years. In December, the venture spent $130 million, or around $372,500 per unit, on a 349-unit complex in Pomona that was completed in 2014.
Standard Communities isn’t the only investor converting market-rate units into cheaper housing. Waterford Property Company has also teamed up with the CSCDA to buy up apartment complexes, most recently buying a 480-unit complex in Pasadena for $280 million.
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