Bascom Group’s Successful Exit from The Square Apartments in Downey: A Testament to Southern California’s Resilient Multifamily Market
The Bascom Group, an Irvine-based private equity firm, has achieved a significant milestone in its investment journey by successfully selling The Square, a 112-unit apartment complex in Downey, for $37.6 million. This sale marks the conclusion of a decade-long value-add investment strategy in one of Los Angeles County’s tightest rental markets. The transaction not only reflects Bascom’s adept navigation through challenging market conditions but also showcases the resilience of Southern California’s multifamily segment in a climate fraught with national headwinds.
A Decade-Long Investment Journey
Acquired in July 2015 for $25.2 million, The Square was transformed through strategic renovations, making it more appealing to renters in a competitive landscape. Bascom renovated 71% of the units, adding features like in-unit washers and dryers. These updates align with evolving renter expectations in supply-constrained markets. Upon its sale on September 18, 2025, the firm realized an impressive gain of approximately $12.4 million—around 49%—demonstrating the efficacy of its value-add strategy. The sale, valuing the property at approximately $335,714 per unit, is indicative of the firm’s commitment to enhancing asset value through upgrades.
Strong Market Performance in Southern California
Despite broader national economic uncertainties, Orange County’s multifamily market has shown remarkable strength, underscoring the strategic timing of Bascom’s exit. According to a report by Matthews Real Estate Investment Services, the area maintained a low vacancy rate of 4% in Q2 2025, well below the national average of 8.1%. This stability is a positive sign, suggesting that robust job growth and a rebound in international migration are buoying demand for rental units in the region. Continued improvements in affordability further fuel the region’s growth, making it an attractive market for multifamily investments.
For further insights into Southern California’s multifamily market trends, you can explore resources like Matthews Real Estate Investment Services for comprehensive reports and statistics.
Robust Demand Indicators
The strong demand for multifamily housing is exemplified by the absorption of 633 units over the past year compared to just 465 units delivered in the same timeframe. This data suggests that the market dynamics are favorable for both developers and investors. Furthermore, Northmarq’s report indicated a 1.7% annual increase in apartment rents through mid-2025, the highest rate since early 2023, indicating a healthy rental market resilient against economic fluctuations.
Real Estate Investment Trends
The multifamily investment landscape continues to show diversity, with cap rates for larger institutional assets hovering around 5% in Q2, while smaller transactions have resulted in private investors seeking yields ranging from 3% to 4%. In a market where the median price per unit in Orange County stood steady at $361,000, The Square’s sale price of $335,714 per unit reflects considerations around the property’s vintage and the remaining units that require renovation. This nuanced understanding of valuation highlights the complexities involved in real estate investments today.
Construction and Development Landscape
On the construction front, Southern California has observed moderation, as no significant new projects have broken ground since mid-2024. While the region remains vigilant amid rising construction costs and tepid rent growth, a robust pipeline of around 5,900 units under construction signifies ongoing confidence in the market’s underlying fundamentals. With developments concentrated in desirable areas like Irvine, future opportunities for investment remain vibrant.
Bascom Group: A Legacy of Value-Add Investments
For Bascom Group, the sale of The Square represents yet another successful execution of its long-standing value-add strategy in the multifamily sector. Since its inception in 1996, the firm has completed over $21 billion in multifamily value-added transactions, encompassing more than 100,000 units. Their robust track record illustrates their capability to adapt and thrive in a constantly evolving real estate landscape.
In conclusion, the successful sale of The Square by the Bascom Group not only highlights a prosperous exit from a decade-long investment but also stands as a testament to the resilience and appeal of Southern California’s multifamily market. For those interested in the dynamics of real estate investment, following the trends in this region remains crucial for understanding broader market fluctuations and opportunities.
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