Majestic Asset Management, Inc. acquired the 29 unit Canon Perdido Apartments in an “off market,” all-cash transaction in January, 2012 for $4,464,000. At $154,000 per unit and an acquisition cap rate of 5.3%, the acquisition is widely considered by industry professionals to be significantly below its fair market value.
Considered “Forever Real Estate” for its unbeatable location, 320 and 322 West Canon Perdido Apartments is situated in the center of downtown Santa Barbara. Santa Barbara is known for its strict no growth policy, most especially toward apartments. With short apartment supply and strong rental demand, greater Santa Barbara has operated with less than a 2.0% apartment vacancy for as long as anyone can remember. Downtown Santa Barbara, which is considered the most desirable submarket and is where the subject property is located, operates at less than a 1.0% vacancy factor, and has long been considered one of the tightest apartment rental markets in the country.
Some of the merits to its “A+” location are as follows:
- 3 blocks from the center of State Street, the epicenter for Santa Barbara’s high end dining, entertainment and retail. 2 blocks from Nordstroms.
- 2 blocks from Chapala Street, which is Santa Barbara’s premier business and employment corridor.
- 0.8 miles to the beach and 1.0 mile to the Santa Barbara Marina.
- 6 blocks from Santa Barbara Community Center, park, swimming pool and 8 tennis courts.
- 3 blocks from the 1 Freeway.
- Countless restaurants, grocers, banks, services and entertainment within walking distance.
In related news, Majestic recently purchased the Shoreham Apartments in West Hollywood and is in currently in escrow on a large industrial building in the San Fernando Valley. Majestic is a full service investment and property management company.