INSIDE THE DEAL: Apt. Sale to Affordable Developer Yields Best Price

By Keat Foong, Executive EditorSan Diego—Selling properties to affordable housing developers may sometimes be the way to go if a seller wants to obtain the best price. CB Richard Ellis recently brokered the sale of a market-rate property, the 95-unit Village Green Apartments, located at 4140-4150 Bonillo Drive in San Diego. The property was purchased by Wakeland Housing and Development Corp., an affordable housing developer that acquires, rehabilitates and develops affordable housing communities in San Diego and throughout California. According to Eric Comer, senior vice president at CBRE, the seller approached CBRE which assessed the highest and best use for the property. “We came to the conclusion that a non-profit affordable developer would be able to pay the highest price.” CBRE took the asset to its short list of affordable developers, said Comer. The buyer, Wakeland, intends to rehabilitate the property as a 4 percent tax-exempt bond deal when the market returns, said Comer. He explained that Century Housing provided financing with the understanding that it will be turned into affordable housing at the future point. Village Green Apartments is well maintained, and the owner was at the time upgrading some of the units, said Comer. Amenities include a swimming pool, spa, playground and laundry facilities.  The family trust had owned the property for about 35 years, said Comer, and was selling because it wanted to redeploy the capital into another investment. Jim Kerriga, Jim Neil and Merrick Matricardi of CBRE represented both Wakeland Housing and the seller, Odom Family LP. It is not necessarily always the case that selling to affordable developers will yield a better price, says Comer. It helps when cities desire affordable housing and will provide the financing and other benefits to make the deal work. In some cases, an affordable transaction may yield lower than market, he noted.