1626 South La Brea Ave, Los Angeles

the successful sale of 1626 South La Brea Avenue, a brand new construction 4-unit property in the 90019 zip code of the Mid City submarket, and it is located inside an opportunity zone.

Completed in 2021, the subject property sits on a 6,525 square foot lot and consists of (4) Four Bedroom / 4 Bathroom units, all equipped with modern, high-end finishes, appliances, and amenities which will help the owner to achieve top of the market rents in one of the city's most desirable neighborhoods. The property was delivered 100% vacant to buyer before certificate of occupancy.

Deal Story

We initially found the deal by shopping for nearly completed new construction multifamily product in LA Opportunity Zones. The LAAA Team was one of the first teams to pioneer the exploitation of a certain Opportunity Zone loophole that allows investors to close on new construction multifamily property before the issuance of the Certificate of Occupancy, enabling them to reap the future tax benefits of opportunity zone investments as if they built it from the ground up themselves.

The Buyer we found had significant capital gains tax exposure from a sale of non real estate investment assets that he was looking to defer, and this Opportunity Zone loophole proved to be the perfect solution to his problem.

After educating the Buyer on the details of the OZ loophole enough to make them feel comfortable (every novel idea comes with natural skepticism, which we had to overcome), we were able to submit an LOI for an all-cash purchase of the subject property in early November 2020. Since this loophole had not been explored by many people up to this point, the LOI was accompanied with terms that were unique to any sale that we have ever negotiated.

Once we were able to agree on a price, the negotiations surrounding the terms of the agreement dragged on for the better part of seven weeks. The negotiations involved attorneys, sophisticated legal language, and a whole lot of back-and-forths between the Buyer, the Seller, and each of their legal teams.

Our goal was to facilitate a sale of an unfinished multifamily development where the Buyer, the Seller, and the GC all felt protected enough to move forward. The terms of the agreement were such that the Developer / Seller was contractually obligated to finish the work necessary to receive the certificate of occupancy from the City after the close of escrow.

With our extensive experience in negotiating contracts for multifamily property...