American Capital Group Begins Sacramento Development

The Kinect at Southport community is ACG’s third Western U.S. transaction this year.

Kinect at Southport

Kinect at Southport. Image courtesy of American Capital Group

American Capital Group has begun its development of Kinect at Southport, a 322-unit apartment community located in West Sacramento, Calif. Mid-Valley Engineering is handling the planning and design, with construction scheduled to begin immediately. The project was funded for an undisclosed amount.

After its completion, Kinect at Southport will feature six four-story buildings, with amenities including private garages, a fitness center, sports courts and a playground. The community will be situated in the city’s West Sacramento neighborhood, placing it within 3 miles of the state capital’s downtown area and Central Business District.

The development of Kinect at Southport is ACG’s third Western U.S. transaction this year, following its sale of Upland at Totem Lake, a 409-unit community in Kirkland, Wash., and its acquisition of 4.6 acres of land for the construction of a future 493-unit community, located in the same city. Other deals in the Sacramento area include Avanath Capital Management’s purchase of a six-community, 1032-unit affordable and senior housing portfolio for $181.6 million.

Sacramento’s uneven recovery

The announcement of Kinect at Southport takes place amid a period of stunted growth for the Sacramento multifamily market, as the city feels the lingering effects of pandemic-related strife and high costs of living. The city’s construction pipeline remains slow, with 8,744 units under construction and just one 162-asset being delivered in the first five months of 2022, according to a July 2022 report  from Yardi Matrix. Still, Sacramento’s total value of transactions is expected to remain above $1 billion, with per-unit prices of $308,633 lying almost $100,000 above the national average, data from the same report shows.

Sacramento’s job growth is recovering quickly, showing a 5 percent rate of growth, with the government, education, leisure and hospitality sectors seeing the largest shares of employment, expanding by 30 basis points over the national average, according to Yardi Matrix data. Such results have attracted numerous multifamily developers and investors who are seeking to capitalize on these sectors.

“Sacramento continues to enjoy one of the highest population growth trajectories among America’s 30 largest metros, but housing supply has not kept pace. Kinect at Southport will support the area’s growth by providing much needed housing in close proximity to Sacramento’s Central Business District,” ACG Presidemt BJ Kuula told Multi-Housing News.

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