Advanced Real Estate Buys 253-Unit Casitas Apartments in Ontario, CA, Closing First Full X Fund Cycle

Advanced Real Estate has acquired the 253-unit Casitas Apartments community in Ontario, California, for $222,000 per unit, the Irvine-based firm announced Nov. 13. The purchase, at roughly $56.2 million, marks the first full cycle of Advanced's X Fund, short for "Exchange Fund." The Mogharebi Group brokered the sale, and Advanced Management Company will manage the property in-house.

Casitas Apartments Acquisition Details

Casitas Apartments, located at 1900 South Campus Avenue in Ontario, consists entirely of single-story residences on nearly 15 acres. The property was built in 1963. Most units have already been renovated, according to Advanced Real Estate.

Advanced assumed the property's existing Freddie Mac loan, which carries a 3.11% interest rate and has approximately three and a half years remaining until maturity. The seller was a private Los Angeles owner. Otto Ozen and Jordan Pakzad of The Mogharebi Group brokered the transaction.

Value-Add Plan for the Ontario Community

Advanced plans to complete the remaining interior renovations and add a swimming pool, install new windows, expand parking and introduce a modern exterior paint scheme. Renovations will be administered through Advanced's affiliated construction company, R3 Construction Services. Advanced Management Company (AMC) will handle property management.

How the X Fund Reached a Full Cycle

The X Fund program begins with property contributions into the fund and ends with the sale of those assets and reinvestment into a larger, more efficient community in Southern California. X Fund 23 was established in 2023 and closed at the end of that calendar year. It received 13 contributions of smaller properties from their owners.

The fund subsequently sold all 13 properties and used 1031 exchanges to reinvest the equity into Casitas Apartments, consolidating those holdings into a single, larger apartment community. Property owners participate as passive limited partners in a professionally managed fund, which transitions them away from daily management responsibilities and direct ownership liabilities. The structure is designed to preserve equity through tax deferral and pursue greater long-term returns, while Advanced handles operations, renovations and future transactions.

"Our X Fund has solved a major problem we have seen in the market for years," said Richard Julian, CEO of Advanced Real Estate. "Property owners have had limited options to finally transition from the rigors of hands-on ownership, preserving their equity tax-free and position themselves for greater future growth. Advanced Real Estate created the X Fund to make that transition seamless and provide access to larger, professionally managed apartment investments with significant potential tax benefits."

Paul Julian, president of Advanced Real Estate and Richard's son, said the structure lets owners move into larger Southern California apartment communities "without the risks associated with identifying and closing on a replacement property in time, or overpaying for a property in a 1031 exchange." He added: "We have successfully consolidated the equity from 13 contributed properties into a 253-unit community, capitalizing on favorable existing financing and a clear path to create additional value. Each year since 2023 we have created a new X Fund. On January 1st, 2027, we'll open X Fund 27 and start accepting properties for next year."

Inland Empire Multifamily Market Context

At roughly $222,000 per unit, Casitas traded about 10% below the Inland Empire multifamily average of approximately $247,000 per unit in the third quarter of 2026. Market conditions in the region during that period included a 4.2% vacancy rate, down 26 basis points year over year, and quarterly absorption of 337 units, compared with 141 units in the third quarter of 2025. The average cap rate was 5.54%, and cap rates have increased for 18 consecutive quarters. San Bernardino recorded the region's lowest vacancy at 3.1%, while Victorville posted the strongest rent growth at 5.1%.

Advanced Real Estate's Portfolio and Recent Activity

Advanced's portfolio includes more than 13,000 apartment units throughout Southern California, with a market value of approximately $5 billion. The firm has used its tax-deferred exchange and contribution structures in other recent deals. In June, Advanced acquired the 126-unit Casa La Paz community in Rowland Heights, rebranded as The Rowland, through its Advanced Fund 24-3 using a 721 contribution structure. In April, the firm purchased the 200-unit Columbia Square Living, now renamed Sky Hollywood, and the 193-unit Jardine Hollywood towers, which the firm described as Southern California's largest multifamily purchase of 2026 at that time. Advanced Fund 24-3 also acquired Newhope Village, a 104-unit property in Santa Ana, in December 2025.

Advanced was formed in 1981 and funds its investments with private equity. It performs property management and renovations through its in-house arms, Advanced Management Company and R3 Construction Services.

Sources

Advanced Real Estate press release: https://www.advancedrealestate.com/advanced-real-estate-acquires-253-unit-casitas-apartments-in-ontario-california