Hamilton Zanze Partnership Acquires Portfolio for $437M

Parc Marin. Image courtesy of Hamilton Zanze and Graham Street Realty

A Hamilton Zanze partnership has acquired 935 multifamily units and several commercial office buildings through Federal Bankruptcy Court. Hamilton Zanze, alongside Graham Street Realty and Davidson Kempner Capital Management acquired a 60-property portfolio of both residential and commercial properties throughout California for $436.5 million.

The portfolio totals more than 1.4 million square feet with properties ranging from 3,500 to 85,000 square feet that are spread across California’s Marin and Sonoma counties. The residential portion of the portfolio includes 39 properties, which are mostly garden-style communities with one property designated as senior living. The communities range from four to 96 units and are located in Novato, San Rafael, Sonoma, Glen Ellen, San Anselmo, Corte Madera.

Kurt Houtkooper, president & CIO of Hamilton Zanze, told Multi-Housing News that the multifamily portion was 89.6 percent occupied at the time of closing. The new ownership also tapped Mission Rock Residential, a Hamilton Zanze affiliate, to manage the communities.

The commercial portion of the portfolio includes 21 properties and totals 680,000 square feet. Houtkooper told MHN that the commercial portion was roughly 70 percent occupied at closing. Paramount Property Co. was also tapped and will manage the commercial office buildings.

The three companies acquired the portfolio after being named the winning bidder in the court’s open bidding process that was held in September. Professional Financial Investors was the previous owner of the portfolio, whose properties have been held in Federal Bankruptcy Court since late 2020. In a more traditional transaction, Hamilton Zanze also acquired a 377-unit community in Charlotte, N.C. in September, marking its entry into the state.

PRESERVING WORKFORCE HOUSING

285 Woodland. Image courtesy of Hamilton Zanze and Graham Street Realty

Ashlee Cabeal, CFO of Hamilton Zanze, said in prepared remarks that the new ownership is planning to invest more than $50 million of capital into the properties. According to Hamilton Zanze, most of the multifamily units in the portfolio are workforce housing and will receive more than half of the investment capital in order to be preserved.

Houtkooper told MHN that the multifamily capital improvements will include site and building improvements, select unit upgrades, water efficiency and energy savings projects and technology enhancements throughout the community. Houtkooper also told MHN that most of the capital improvements projects will be completed within the first year of ownership.