BUENA PARK — An “irreplaceable” 183-unit 1960s-era apartment community has traded for $53.1 million, a sign that older Orange County apartment communities still have lots of value, especially in the world of bigger, better and denser.

Irvine-based real estate investment firm The Bascom Group purchased the Castlewood Park Apartments, a garden-style apartment community at 6968 Campus Drive in Buena Park, from Huntington Beach-based Newcastle Enterprise Ltd.

According to CoStar, the property sold for about $290,300 per unit.

Kevin Green and Joseph Grabiec of Institutional Property Advisors represented both the buyer and seller. BrightSpire Capital provided the financing, and IPA Capital Markets arranged the loan. AMC will manage the property and SD-Cap will handle the renovations.

Bascom officials said the company plans to invest another $9.6 million over time to update the property, which was built in 1963, while keeping the features that made it appealing in the first place.

“Our objective is to provide a well-maintained, professionally managed community that continues to offer an attractive alternative to homeownership,” said Joe Ferguson, vice president of acquisitions at The Bascom Group.

Replacement Costs

Bascom’s acquisition comes at a time when apartment investors are investing more in existing value-add communities that would be much harder and far more expensive to build today.

With an uncertain global economy, tariffs, higher construction and land costs, more expensive financing, and the need to navigate lengthy county or city approval processes, low-density apartment projects have become much less common in Orange County.

In short, it’s easier to upgrade or modernize an existing older building than building one from the ground up.

“One of the reasons we believe communities like Castlewood are attractive is that replacing them today would likely be significantly more expensive,” Ferguson said. “Between land costs, construction costs, financing and the entitlement process, developing a low-density, garden-style community on roughly eight acres in Orange County would be challenging in today’s environment.”

Most of the units at Castlewood Park have two or three bedrooms, and there is one four-bedroom unit. The property covers almost nine acres and has 46 buildings, averaging about 21 units per acre.

Many developers building ground-up apartments are putting in as many as 70 units per acre, depending on location.

Castlewood also features larger apartments, with each unit averaging about 1,028 square feet. Every unit has a garage, and many residents have private yards.

Ferguson said these kinds of amenities are becoming harder to find in new apartment communities.

“Those features provide residents with more space and functionality than is typical for many apartment communities today while also supporting a compelling long-term investment opportunity,” he said.

Workforce Housing

Bascom describes the property as workforce housing, saying it serves families who want to live near employment centers but can’t afford to buy a home.­

According to CoStar, rent for a similar property in the Buena Park submarket sits at $2,337. The median list price of a home in Buena Park is $949,000, according to Reports on Housing.

“When we refer to workforce housing, we’re generally talking about housing that serves individuals and families who want to live near employment centers but may not be in a position to purchase a home,” Ferguson said.

The renovation plan will upgrade apartment interiors, improve amenities, and address any maintenance that has been delayed.

Ferguson said residents will likely first notice more on-site management staff, who will focus on maintenance, leasing and improved communication with residents.

Some institutional investors are more cautious about buying older apartment communities since they often need more investment and active management.

However, Bascom sees this as an opportunity, Ferguson said.

“Bascom has spent decades acquiring and repositioning older apartment communities, so we believe our experience allows us to evaluate opportunities like Castlewood through a different lens,” Ferguson said.