Santa Fe-based investment management firm Faulkner Capital Partners recently acquired an 86-unit apartment building on Cherokee Avenue in Hollywood, just one block north of the Hollywood Walk of Fame. The investment firm paid $33.9 million for the property located at 1818 North Cherokee Avenue, known as The Baxter.
The property was completed in 2024 and includes two levels of subterranean parking and hotel-like amenities. Each unit includes a washer and dryer, stainless steel smart home appliances, walk-in closets and balconies. Residents also have access to a rooftop sundeck with an outdoor fireplace, a community clubhouse, a fitness center, a pet play area, electric vehicle charging stations, and a pool, to name a few. The property’s own website says that one-bedroom units start at $2,599, while two-bedroom units start at $4,350 per month.
A report in the LA Times says that the sale price of the apartment building equates to $394,000 per unit and that the building was acquired at a 5.5% cap rate – that is, the ratio of net operating income to the total price of the complex. Faulkner acquired the property for less than the cost of construction due to delays and expensive floating-rate debt, the report said.
An executive from Faulkner added that he expects the high cost of construction in the neighborhood to keep the supply of new apartments low until asking rents rise enough that new construction is viable.
A report in Urbanize LA from May 2022 says that the building includes 21 deed-restricted affordable housing units. That agreement with the city granted a density bonus incentive, which allowed for a larger building than is allowed in the zoning district.
Brokerage firm Colliers, which represented the seller and the buyer in the transaction, said that the firm’s Vice Chair Kitty Wallace orchestrated the sale. The property was developed by real estate firms CGI+ Real Estate Investments of Encino and Beverly Hills-based firm Wilshire Skyline, Colliers said.
CGI+ is also the real estate firm behind the adjacent apartment complex, known as The James of Hollywood. That building was officially opened in July 2020 and is a sister building of The Baxter. It includes 73 studio and one-bedroom units ranging from 350 to 810 square feet.
Records from the Los Angeles County Assessor show that the property has an assessed value of $29.5 million.
A report from real estate firm CBRE said that the average asking rents in Hollywood at the end of March reached $2,976. A total of 543 units were completed in the neighborhood in the last 12 months ending in March.
