Introduction to Pasadena’s Multifamily Sales Market
Pasadena’s multifamily sales market has seen significant activity in the first three quarters of the year, with Houston-based Hines nabbing the top spot. The company acquired Pasadena Gateway Villas for $60 million in March, securing the priciest sale in Pasadena, according to Los Angeles County tax assessor data. The seller was Washington Capital Management, based in Seattle.
The Pasadena Gateway Villas Deal
The deal for the 140-unit four-story Pasadena Gateway Villas at 290 North Hudson Avenue equated to $428,571 per unit. Brokers Kevin Shannon, Chris Benton, Ken White, Dean Zander, Mitch Clarfield, and Anthony Muhlstein of Newmark represented the seller. Newmark’s Gabe Munson represented the buyer. The property is considered a "standout asset" due to its strong fundamentals, including a favorable transaction size, prime location, and strategic positioning.
Location and Tax Benefits
The property’s location in Pasadena means it is not subject to the City of Los Angeles’ Measure ULA real estate transfer tax. The voter-approved "mansion tax," which went into effect on April 1, 2023, imposes a 4 percent fee on all property sales above $5 million and a 5.5 percent fee on sales above $10 million within the L.A. city limits. This tax benefit drew more than 40 offers for the property, according to Shannon.
Hines’ Value-Add Plan
Hines reportedly has a "value-add plan" for the 23-year-old Pasadena complex, including an overhaul intended to add resort-style offerings at the 1.6-acre property. Pasadena Gateway Villas — set in the foothills of the San Gabriel Mountains — includes studio to three-bedroom units marketed to the city’s higher-end renter base. Apartments come with gas fireplaces, in-unit washers and dryers, private balconies or patios, and vaulted ceilings. The complex offers a pool and spa, fitness center, and outdoor lounge spaces.
Comparison to Other Multifamily Sales
Hines’ acquisition is more than double the price of the second-most expensive multifamily purchase in Pasadena. Ranked No. 2 is Alur Apartments, a residential community featuring 51, one- and two-bedroom apartments at 700 Locust Street, which traded for $21.8 million. The Alur deal more than tripled the third-priciest deal; a two-building, 24-unit complex at 1720-1724 Huntington Drive that sold for $5.8 million.
Read More
For more information on multifamily sales in Pasadena, readers can explore the following articles:
Hines’ Pasadena apartments deal due to no "mansion tax": Newmark broker
LA City Council approves guidelines for Measure ULA spending
Conclusion
The Pasadena Gateway Villas deal highlights the strong demand for multifamily properties in Pasadena, particularly those that offer a prime location and are not subject to the City of Los Angeles’ Measure ULA real estate transfer tax. Hines’ acquisition is a significant investment in the city’s multifamily market, and the company’s value-add plan is expected to enhance the property’s amenities and appeal to high-end renters.
FAQs
Q: What was the purchase price of Pasadena Gateway Villas?
A: The purchase price was $60 million.
Q: Who was the seller of Pasadena Gateway Villas?
A: The seller was Washington Capital Management, based in Seattle.
Q: What is the average price per unit of Pasadena Gateway Villas?
A: The average price per unit is $428,571.
Q: What is the location of Pasadena Gateway Villas?
A: The property is located at 290 North Hudson Avenue in Pasadena.
Q: Is Pasadena Gateway Villas subject to the City of Los Angeles’ Measure ULA real estate transfer tax?
A: No, the property is not subject to the tax because it is located in Pasadena, outside of the City of Los Angeles’ limits.
