62-Unit Affordable Housing Property on Santa Catalina Island Sells for $8.6 Million

Marcus & Millichap has brokered the $8.6 million sale of the Tremont Street Apartments, a 62-unit affordable housing complex situated in Avalon, the only incorporated city on California's Santa Catalina Island. The property was acquired by Newport Beach, California-based Tailwind Investment Group from the seller, a limited partnership named Black Rose Catalina. Brokers Arteen Zahiri and Tony Azzi from Marcus & Millichap's Los Angeles office facilitated the transaction for both sides.

Built in 1983, the apartment community operates under a Section 8 Housing Assistance Payments (HAP) contract, ensuring its affordability. A critical component of the deal is the property's long-term ground lease with the Santa Catalina Island Co., which is in effect until 2053. This structure guarantees the continuation of the property's affordable housing status under its existing HAP contract and the extended ground lease. The Santa Catalina Island Co., a private entity, manages substantial tourism operations, commercial properties, and land holdings across Catalina Island. This acquisition highlights the sustained demand for and preservation of affordable housing assets, particularly in unique island markets where development can face specific challenges. The long-term ground lease provides stability for the property's future as an affordable housing resource.