Is Oxnard The Next Hot Market?
LOS ANGELES—Oxnard is moving into the radar of multifamily investors. Located in Ventura County, the Oxnard submarket has seen tremendous economic growth and strong fundamentals. JRK Property Holdings has recently purchased a 186-unit property in the market, its second major purchase in the market. We sat down with Greg Heller, VP at JRK Property Holdings, to discuss its investment strategy in the market and why Oxnard is falling on their radar. Here, Heller tells us about the economic changes in the market and why they are still bullish there in 2017.
GlobeSt.com: Tell me about the investment activity in Oxnard.
Greg Heller: We are very excited to announce the purchase of 168-unit Rancho Solana, our second property in Oxnard, California, which closed in the fourth quarter. The investment represents a rare opportunity to acquire an asset that is both in a high barrier to entry coastal market and has very strong in-place cash returns. We anticipate outsized growth due to the combination of a rising resident profile and strong historical occupancy. Since the property was built in 1973, the curb appeal, amenities and interior finishes are dated and we plan to renovate the property so that it will compete directly with higher end properties in the area. Rancho is only one mile from JRK’s 400-unit, 2008 vintage Serenade at RiverPark. While the two properties differ in price point and style, we will be able to both cater to multiple segments of the rental market and also achieve operational efficiencies.
GlobeSt.com: How has the local economy in Oxnard evolved and changed?
Heller: Over the past several years, Ventura County has dramatically shifted from a region highly dependent upon government funded aerospace and defense programs to a leading center for high-tech, telecommunications, clean energy and healthcare. Oxnard is located along the 101 Tech Corridor, which is now one of the top areas for technology output in Southern California. With the development and enthusiastic reception of The Collection, a 650,000 SF shopping destination anchored by Whole Foods market, Target, H&M, and REI, Oxnard has additionally transformed into a major retail destination in Ventura County.
GlobeSt.com: Why is this market on your investment radar, and how does it fit into your strategy
Heller: JRK loves California and is targeting markets outside of Los Angeles and San Francisco that draft off of the fundamentals that make those markets strong but provide higher yields. Oxnard specifically has very strong demographic trends due its coastal California location and easy connectivity to the major employment centers of Los Angeles and Santa Barbara. Additionally, Ventura County’s SOAR (Save Open-Space and Agricultural Resources) ordinances and initiatives restrict changes in land use to voter approval for any suburban development. These measures lead to high barriers to entry for apartment developers and limit multifamily competition.
GlobeSt.com: What kinds of opportunities are available in this market, and what is the competition like from other investors?
Heller: Part of Oxnard’s appeal lies in its lack of institutionally sized quality product. When offerings do hit the market, they are often hotly contested. In both Oxnard acquisitions, JRK was awarded the deal based on concise due diligence and the ability to close quickly with $830 million of active private equity funds fueling our purchasing power.
GlobeSt.com: Do you expect to remain active in this market, and why or why not?
Heller: While we are bullish on Oxnard’s growth, JRK remains opportunistic in nature and is actively pursuing investments in high growth areas nationwide. However, with our presence in Oxnard already established, JRK would not hesitate to expand its local presence to capitalize on its strong fundamentals.