1720 Petaluma Ave, Long Beach, CA 90815

Description

Located in one of the most sought-after, supply-constrained submarkets in Southern California, 1720 Petaluma Ave sits in East Long Beach just 0.5 miles from the CSULB campus. No new apartment buildings have been built in the 90815 zip code since 1989, which makes this rare, like-new offering stand out. The property is a purpose-built student housing asset with two spacious, turnkey detached homes on an expansive lot: a fully rebuilt and expanded front house and a brand-new rear home. It's a great fit for either a cash-flowing investment or an owner user. The front house was taken down to the studs and expanded with new construction into a 7 bed / 7 bath open floor plan home. The rear house is a 100% new construction 4 bed / 4 bath home with expansive 15 ft ceilings and lots of natural light. Both homes feature luxury vinyl plank floors, new high-end finishes and appliances, and a private ensuite bathroom for every bedroom. Each home has its own washer and dryer and private patio, and tenants share a large backyard with a lounge area and spa.

The property is currently operated as CSULB student housing, with 11 rooms averaging $1,383/mo each for $15,215/mo, or $182,580 in gross annual income. Tenants pay all utilities, and parents co-sign every lease to guarantee rent. With an NOI of $132,681, 1720 Petaluma is attractively priced at a 5.54% cap rate, with another 13% of NOI upside and excellent loan terms available. That is the highest cap rate, lowest GRM, and lowest price per bedroom of any comparable CSULB-area sale in the past two years, about 28% below the median price per bedroom. Rooms rent for about 14% below comparable properties and for roughly the cost of an on-campus dorm, with a private ensuite bath instead of a shared hall. Owners can add further value by converting the garage or building a second detached ADU under California's new AB 956. CSULB has 40,000 students but housing for only 9% of them, and the property has been 100% pre-leased since 2022 with steady rent growth year over year. Professionally managed for easy ownership, this opportunity offers a strong and steady renter base, a hedge against California rent control, continued rent growth, and long-term appreciation in the A+ East Long Beach submarket.