Marcus & Millichap Brokers $8.64M Sale of 62-Unit Affordable Housing Property on Santa Catalina Island

Marcus & Millichap has arranged the $8.64 million sale of Tremont Street Apartments, a 62-unit affordable multifamily property located in Avalon on Santa Catalina Island, California, the firm announced Sept. 14, 2026. The seller, Black Rose Catalina L.P., conveyed the asset to buyer Tailwind Investment Group at a price of $139,419 per unit.

Property Overview

Tremont Street Apartments sits on 1.42 acres at 321 Tremont St. in Avalon, the only incorporated city on Santa Catalina Island, roughly 22 miles off the Los Angeles County coast. Built in 1983, the community comprises five two-story buildings totaling 58,700 square feet of residential area and 62 units — 10 one-bedroom, 37 two-bedroom, and 15 three-bedroom apartments. The property is positioned less than a mile from the beach, ferry terminal, restaurants, and retail shops.

The apartment community operates under a project-based HUD Section 8 Housing Assistance Payments contract and is encumbered by a ground lease with the Santa Catalina Island Company running through 2053. The property carried 100% occupancy at the time of sale, with a waiting list reported to exceed 30 years — a figure that reflects the severe supply constraints inherent to island living and the depth of demand for affordable units in Avalon.

Transaction Complexity and Deal Structure

The transaction closed Sept. 3, 2026, ahead of the public announcement. Completing the deal required navigating several layers of regulatory and financial coordination, including ground lease approvals from the Santa Catalina Island Company, HUD approval for the Section 8 HAP contract assignment, the assignment itself, and the assumption of an existing Freddie Mac loan.

"Affordable housing transactions often require coordination among multiple parties, and this sale was particularly complex due to the ground lease, HUD approval, HAP contract assignment and Freddie Mac loan assumption," said Arteen Zahiri, associate director investments at Marcus & Millichap. "Successfully navigating each of those components allowed the transaction to close while preserving 62 units of affordable housing for the Avalon community."

The property is expected to continue operating as an affordable housing community under its existing HAP contract and long-term ground lease.

Brokerage and Parties

Tony Azzi and Arteen Zahiri, both members of the Azzi Group in Marcus & Millichap's Los Angeles office, held the exclusive listing on behalf of seller Black Rose Catalina L.P. and also procured buyer Tailwind Investment Group.

The transaction was priced at approximately $147 per square foot based on the property's 58,700 square feet of net rentable area.

Market Context

Avalon's geography imposes hard limits on new housing supply, making existing affordable stock particularly difficult to replace. The HAP contract assignment ensures that rental subsidies remain in place under Tailwind Investment Group's ownership, maintaining affordability for current and future residents.

Marcus & Millichap closed 8,818 transactions in 2025 with a total sales volume of approximately $50.9 billion. The firm operates more than 80 offices across the United States and Canada.

Sources

Marcus & Millichap Press Release — Tremont Street Apartments