3614 Pasadena Ave
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The sale of 3614 Pasadena Ave involved a complex mixed-use portfolio positioned directly across from the Heritage Square Gold Line Station. While the long-term upside was clear, the asset’s scale, deferred maintenance, and unit mix required a buyer willing to take on a multi-parcel repositioning project in a transitioning Northeast LA submarket.
Background
3614 Pasadena Ave was part of the Heritage Square portfolio, a 25-unit mixed-use assemblage located in Northeast Los Angeles directly across from the Heritage Square Gold Line Station. The portfolio consisted of 22 residential units and 3 ground-floor commercial spaces spread across multiple parcels.
The residential component included a 17-unit bungalow-style property located at 106–114 E Ave 37 and 103–117 E Ave 36, situated on 2 parcels totaling approx. 38,583 SF of land. The second component, located at 3614–3618 Pasadena Ave, sat on an approx. 12,433 SF lot zoned RAS3 and included 5 residential units above 3 commercial spaces.
In total, the portfolio encompassed more than 51,000 SF of land and was eligible for Tier 3 TOC incentives due to its immediate proximity to transit. At the time of sale, rents across much of the portfolio were significantly below market, with estimated rental upside of approx. 60% following renovation and repositioning.
Despite the location and long-term redevelopment potential, the seller viewed the portfolio as an outlier relative to the rest of his holdings and elected to pursue a sale rather than commit additional capital and management resources.
Challenge
While the fundamentals were compelling, the portfolio presented several execution challenges. The unit mix was atypical, combining bungalow-style residential product with street-front commercial space. Many units were leased at low rents, and the properties carried a substantial amount of deferred maintenance.
These factors narrowed the buyer pool considerably. The opportunity was not well suited for smaller investors or buyers seeking stabilized income. Instead, it required a value-add investor capable of underwriting a multi-phase mixed-use project, managing construction, and navigating entitlement and repositioning considerations tied to TOC zoning.
Managing expectations around pricing, timelines, and buyer sophistication was critical throughout the marketing process.
Result
Approx. 30 days after signing the listing agreement, a qualified buyer was identified with experience executing mixed-use and transit-adjacent repositioning projects. Escrow opened in Nov. 2021.
The due diligence period presented several obstacles related to condition, tenant matters, and scope of work. Despite these issues, the transaction moved forward and closed at a purchase price of $5,270,000.
For the seller, the sale provided a clean exit from a non-core holding without committing additional capital. For the buyer, 3614 Pasadena Ave represented an opportunity to explore multiple redevelopment and mixed-use concepts in a Northeast LA neighborhood continuing to evolve around transit infrastructure.
Story Details
Name
3614 Pasadena Ave
Closed Time
Price
$5,270,000.
Location
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