ORANGE GROVE CIRCLE in PASADENA, CALIFORNIA

Our Opportunity

Situated along “Millionaire’s Row” in Pasadena, California, the 64 units on the property were divided amongst 14 buildings on over 5.5 acres of land. The units were in disrepair and had rental rates well below the market average. The Ratkovich Company was able to renovate the units, add lush landscaping to the grounds, and add a high level of service with TRC’s own property management company. After increasing the property’s operating income by bringing rents up to market rates, The Ratkovich Company processed a tentative tract map on for the property so that the units could be sold as condominiums.

Our Investment

Purchased in a partnership with Prudential Real Estate Investors for $19.2 million with an additional capitalization of $1.8 million for capital improvements. Wells Fargo provided a loan for $13.8 million with the remaining $7.2 million being funded by equity.

The Results

In March of 2007, The Ratkovich Company sold the property, with a Tentative Tract Map approved, to ColRich, a condominium developer. The project yielded an IRR of 33.0% to The Ratkovich Company over approximately 3 years of ownership.