By Samantha Goldberg, Associate Editor
Hayward, Calif.—29th Street Capital (29SC) completed its 12th multifamily acquisition of 2015 with the purchase of a two-property, 69-unit apartment portfolio in the East Bay of San Francisco. The company plans to complete $855,000 worth of renovations at the 44-unit Plaza Verde Apartments and 25-unit Eden Apartments to upgrade their interiors and enhance their exteriors. The transaction closed December 17 and the transaction price was not disclosed.
“This is the 10th acquisition we have made in the East Bay of San Francisco in under two and a half years, with an 11th property in Hayward under contract for purchase, closing in January,” said Casey Davis, 29SC’s vice president of acquisitions for California.
Eden Apartments is located at 550 Berry Ave. in the increasingly popular downtown Hayward while Plaza Verde, at 1201 B Street, which is about one mile away in a more residential area. Both apartment communities are located about 25 miles away from San Francisco, which residents can access via the nearby San Mateo Bridge and I-880 or the nearby BART Station.
East Bay has seen a tight rental market as limited housing supply hasn’t kept up with the increasing demand that has resulted from strong job creation in San Francisco, Oakland and Silicon Valley. Hayward, the sixth largest city in the East Bay and home to 150,000 residents, provides affordable rental housing options.
29SC bought the two properties through an off-market sale and at a 23 percent discount to comparable current sale prices. The previous owner had operated the assets for more than two decades and decided to liquidate and retire. The transaction will allow the company to address any deferred maintenance and invest an average of more than $12,000 per unit. The renovation budget at Plaza Verde will be used to increase curb appeal through new windows and landscaping upgrades, as well as to upgrade cabinets, countertops and flooring, and remodel the bathrooms.
29SC has purchased multifamily assets in markets including Houston, Denver and Phoenix, with a focus on targeting smaller value-add deals that are below the institutional radar and offering its investors above-market returns. Investments typically require about $2 million to $10 million of equity per deal and involve the acquisition or recapitalization of real estate assets or portfolios.
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