Value-add multifamily properties in mid-markets are snapped up by investors
The seller and buyer were represented by Colliers’ Senior Vice Presidents Ryan Rodriguez and Vice President Gavin McDowell. The seller consisted of a group of owners who had been in posession of the property for over 50 years. The buyer is FPA Multifamily LLC, a real estate operating company focused on the acquisition, renovation and management of both core plus and work force housing apartment communities. Given the interest for value-add investment opportunities, Rodriguez and McDowell were able to procure a buyer in 45 days. At the time of the sale, fifty of the apartments’ 60 units were leased at 83.3% capacity.
“We are currently in a once in a generation market,” said Dowell. “The inventory of multifamily investments are in short supply and yet we continue to see significant demand in the mid-market space. Given the lack of value-add opportunities in the Bay Area we can expect to see cap rates compress as investors look for quality assets.”
The exodus of renters from urban city centers to suburban areas in the past year and a half has highlighted a growing need for housing in areas like southern Alameda County that have absorbed these individuals. The buyers have multiple opportunities to add value to the property and transform it into a high-performing Class B asset that addresses this growing trend. Of these opportunities is a .96-acre undeveloped parcel adjacent to the property that is zoned for the addition of 20-25 Type V units. This addition would increase the current unit count by 30 percent, an unprecedented amount for the Bay Area. Furthermore, the apartments’ address at 2100 Miramonte Avenue is situated in an unincorporated area of Alameda County that excludes it from local rent control ordinances.
The asset, called Saratoga Apartments, is a low-rise apartment building spanning three-stories that was originally built in 1965. Two-bedroom, two-bathroom units make up the majority of the apartments’ unit mix. Other units offered include 16 one-bedroom, one-bathroom units and three three-bedroom, two-bathroom units. All units feature their own private balcony or patio. Also located within the expansive, lushly landscaped property are 98 parking spaces, a swimming pool with deck seating, on-site laundry and storage. Under three miles away from the apartments are a host of amenities in Castro Valley including the newly built Eden Medical Center, Castro Village Shopping and Dining, Castro Valley BART, Lake Chabot Regional Park.
Allison+Partners for Colliers Northern California
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About FPA Multifamily
FPA Multifamily, LLC is a real estate operating company focused on the acquisition, renovation and management of both core plus and work force housing apartment communities. Founded in 1985, FPA has owned over 133,000 apartment units valued at over $17 billion. FPA is currently investing through its value-add focused FPA Apartment Opportunity Fund VII which will acquire approximately $3.0 billion of assets and its core-plus focused FPA Core Plus Fund V which will acquire approximately $1.9 billion of assets. Headquartered in San Francisco, FPA also has offices in Atlanta, Chicago, Dallas, Denver, Irvine and Washington DC. For more information, please visit www.fpamf.com.