Jonathan Rose Cos. Acquires San Jose Community
The new owner signed an agreement to make the 331-unit apartment complex affordable.
Jonathan Rose Cos. Acquired The Grove from Nuveen Real Estate in a $102 million deal. Image courtesy of Nuveen Real Estate
Jonathan Rose Cos. has acquired a market-rate community in San Jose, Calif. with plans to convert the apartment complex into affordable housing. The company purchased The Grove from Nuveen Real Estate for $102 million. IPA’s Salvatore Saglimbeni brokered the sale, while Berkadia arranged a $68.5 million acquisition financing package through the Fannie Mae Affordable Housing Preservation program.
The new owner will be working with the Bay Area Housing Finance Authority and its nonprofit partner, Pacific Housing, to ensure affordable rents at the property. Jonathan Rose Cos. entered into a 55-year regulatory agreement with BAHFA to restrict rents at the property’s affordable units to 80 percent of Area Median Income and limit the maximum rent increase on all rent- and income-restricted units to three percent a year.
The 331-unit apartment complex offers studio and one-, two- and three-bedroom floorplans. Residents also have access to a demonstration kitchen, fitness center, pool and lounge, as well as a patio with grills and a picnic area. Located at 1919 Fruitdale Ave., the community is near San Jose’s downtown and many universities and employers, including San Jose City College, San Jose State University and the Santa Clara Valley Medical Center.
As part of the acquisition, Jonathan Rose Cos. has plans for a $11 million capital improvement program. The upgrades will include common area improvements, roof replacements, HVAC replacement in certain units, elevator modernizations, site security enhancements, and the addition of a resident services office. The new ownership is also planning on hiring a dedicated resident services coordinator that will introduce social services programming to the residents. Jonathan Rose Cos. tapped John Stewart Co. as the community’s new property manager.
First acquisition in San Jose
Jonathan Rose Cos.’ acquisition of The Grove adds to the company’s portfolio of California affordable housing properties and marks its first asset in San Jose. Nathan Taft, CIO at Jonathan Rose Cos., said in prepared remarks that The Grove adds to the company’s strategy of acquiring, preserving and improving well-located multifamily housing in target markets across the U.S.
Last year, Jonathan Rose Cos. started construction on a 137-unit fully affordable community in Los Angeles, along with Wakeland Housing and Development Corp. The company has also expanded into senior housing in the Detroit metro, acquiring two communities totalling 393 units in September 2022.
”Jonathan Rose Cos. is actively evaluating opportunities to grow our footprint in San Jose and other high-cost population centers across the state,” Max Jawer, director of investments at Jonathan Rose Cos., told Multi-Housing News.
