The $107 Million Deal Redefining Affordable Housing in Southern California

HACIENDA HEIGHTS, Calif. – November 24, 2025 – A recent $107 million transaction in the heart of the San Gabriel Valley is more than just another large-scale real estate deal; it’s a potential blueprint for addressing California's relentless housing crisis. The sale of Hills at Hacienda Heights, a 350-unit multifamily property, to private equity firm Eagle Partners is setting a new precedent by leveraging institutional capital to immediately convert a market-rate apartment complex into long-term affordable housing, a move that sidesteps the lengthy timelines and complexities of new construction.

The deal, brokered by Institutional Property Advisors (IPA), a division of Marcus & Millichap, saw the asset trade for a formidable $305,714 per unit. But the real story lies in the financing and the strategic intent behind the acquisition. With $71 million in acquisition financing also arranged by IPA, Eagle Partners is executing a market-to-affordable conversion that will preserve housing for low-to-moderate-income families in a region grappling with a severe jobs-housing imbalance. This transaction highlights a sophisticated convergence of private investment strategy and public policy objectives, offering a scalable model in a state desperate for solutions.

A New Blueprint for Affordability

At the core of this deal is an innovative approach to creating affordable housing. Rather than building from the ground up—a process often mired in years of approvals and reliant on competitive Low-Income Housing Tax Credits (LIHTC)—Eagle Partners is preserving affordability in an existing, high-quality asset. The firm plans to deed-restrict all 350 units for households earning up to 80% of the Area Median Income (AMI). For a two-person household in Los Angeles County, this translates to an annual income cap of approximately $96,950.

This "preservation acquisition" was facilitated through a crucial public-private partnership involving the California Housing Finance Agency (CalHFA). This collaboration allowed for the regulatory agreement to be implemented immediately at the close of the sale, effectively creating 350 units of affordable housing overnight. Touting the creative solutions needed to address the state's housing shortage, CalHFA's Executive Director, Tony Sertich, has previously emphasized the agency's commitment to such innovative partnerships.

Significantly, the conversion is designed to minimize displacement. Eagle Partners has stated that existing tenants whose incomes exceed the new AMI limits will not be forced to leave. As units naturally turn over, new residents will be required to meet the income qualifications. This thoughtful approach addresses one of the primary concerns associated with large-scale property conversions. Initial analysis suggests the transition may be smoother than anticipated, with an estimated 65% of current residents already falling within the new income guidelines. Moreover, the firm has indicated that rents for many units will remain at their current "naturally affordable" levels, with some even seeing reductions of up to 20%, ensuring the property serves its intended purpose without disrupting the existing community.

San Gabriel Valley's Unyielding Magnetism for Capital

The decision to pour over $100 million into a Hacienda Heights property is a calculated bet on the enduring strength of the San Gabriel Valley market. The region is projected to be one of the nation's fastest-growing rental markets, a claim substantiated by powerful underlying economic and demographic forces. As IPA executive Joseph Grabiec noted, the area’s "diverse employment base, rapidly growing distribution and logistics industries, and undersupply of housing" create a compelling investment thesis.

The East San Gabriel Valley suffers from a pronounced jobs-housing imbalance. While nearly 100,000 residents are employed, the area offers fewer than 36,000 jobs, forcing a majority to commute to major employment hubs in the City of Industry, Pasadena, and Downtown Los Angeles. This structural deficit creates intense, sustained demand for local rental housing. The property itself is strategically located near major transportation corridors, including California State Routes 60 and 57 and Interstates 10 and 605, providing access to over 2.5 million jobs.

Key employment sectors like healthcare, aerospace manufacturing, and logistics anchor the regional economy, with major employers such as Utility Trailer Manufacturing Co. and Smurfit Westrock providing stable job growth. This robust economic foundation, coupled with a chronic lack of new housing supply, ensures low vacancy rates and consistent rent growth, making multifamily assets like Hills at Hacienda Heights a prime target for institutional investors seeking stable, long-term returns.

The Architects of the Deal: Navigating Complexity

Executing a transaction of this scale and complexity requires deep market expertise and sophisticated financial engineering. Institutional Property Advisors demonstrated its prowess by serving as the linchpin for the entire deal. The firm's team, led by Kevin Green, Joseph Grabiec, and Gregory Harris, not only represented the seller but also procured Eagle Partners as the buyer, showcasing their extensive network and ability to match the right capital with the right opportunity. "We are excited to close our first transaction with Eagle Partners,” said Kevin Green, IPA executive managing director. “They demonstrated strong execution throughout the transaction, moving efficiently from due diligence through closing.”

Furthermore, the financing component was equally critical. IPA Capital Markets, the financing arm of Marcus & Millichap, arranged the $71 million acquisition loan. The team, composed of Brian Eisendrath, Cameron Chalfant, Jake Vitta, and Tyler Johnson, structured a deal that aligned with the buyer's unique affordable housing conversion strategy. "Given the property’s location in a submarket with limited new supply and a widening affordability gap, this positioned Eagle Partners to execute a significant affordable housing conversion that meets an important local need," stated Johnson.

This integrated approach—combining investment sales brokerage with capital markets advisory under one roof—highlights a key trend in commercial real estate services. For institutional clients like Eagle Partners, having a single-source advisor that can navigate both the acquisition and the intricate financing for a specialized project is invaluable. It streamlines the process and ensures that the financial structure is perfectly tailored to the asset's business plan, which in this case, was the preservation of long-term affordability.

From Value-Add to Community Value

Unlike many properties targeted for affordable conversion, Hills at Hacienda Heights is not a distressed asset requiring a complete overhaul. Built in 1970, the gated community has been undergoing significant renovations since 2015. Previous owners, including a partnership between Intercontinental Real Estate Corporation and MG Properties Group, invested heavily in a multi-year plan to upgrade unit interiors, common areas, and building systems.

Today, the 10-acre property boasts a suite of modern amenities, including three swimming pools, a spa, a fitness center, and a co-working lounge. The apartments feature eight-foot ceilings, in-unit washers and dryers, stainless-steel appliances, and quartz or granite countertops—finishes typically associated with market-rate or luxury rentals. The average unit size is a comfortable 792 square feet.

Eagle Partners' strategy is not to rescue a failing property but to preserve an already desirable one for a wider range of incomes. Their plan for "targeted capital reinvestment" aims to enhance the resident experience further, ensuring the property remains a high-quality community asset for decades to come. This approach challenges the notion that affordable housing must equate to lower-quality living standards. By acquiring a well-maintained, recently renovated property and locking in affordable rents, the firm is creating a stable, attractive housing option for the region’s essential workforce, demonstrating that strong financial returns and positive community impact can be powerfully aligned.