JSB, Faulkner Buy Bay Area Asset, Eye Affordable Conversion
The 1976-completed property underwent renovations prior to the sale.
JSB Capital Group and Faulkner Capital Partners have purchased Bayfair Apartments, a 135-unit multifamily property in San Lorenzo, Calif., with plans to designate part of the apartments as affordable housing. Fuller Enterprises previously owned the asset, Yardi Matrix data shows.
Berkadia arranged $23.2 million in acquisition financing through Fannie Mae’s Multifamily Affordable Housing program. The note features a seven-year term with five years of interest-only payments.
Located on approximately 4 acres at 16077 Ashland Ave., Bayfair Apartments is within walking distance of the 820,000-square-foot Bayfair Center, one of the first malls across San Francisco’s East Bay. The property is just off Highway 185 and close to interstates 238 and 580.
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The 1976-completed community comprises one- and two-bedroom layouts averaging 671 square feet across 13 three-story buildings. Many units were renovated prior to the sale, gaining simulated wood flooring, granite countertops and updated fixtures. Amenities include a swimming pool, landscaped courtyard and covered parking.
Berkadia Managing Director Matthew Robbins and Vice President Abigail Beauchamp, together with Senior Managing Director Mitch Sinberg, in addition to Managing Directors Scott Wadler and Brad Williamson, led the acquisition proceedings.
Bay Area’s market-to-affordable conversions
Converting existing market-rate properties to income-restricted communities continues to be an attractive alternative to ground-up affordable developments across the Bay Area, especially if acquired below replacement costs.
The Vistria Group has been one of the investors active in the market-to-affordable conversion across the broader market. Last year, the company teamed up with Standard Communities to buy the 948-unit Park Kiely in San Jose, Calif., for $410 million, marking the largest such conversion in the state’s history at the time.
That deal closed one year after Vistria partnered with Ethos Real Estate to renovate and convert to affordable housing the 697-unit Hillsdale Garden Apartments in San Mateo, Calif., across the Bay from San Lorenzo. Ethos paid $252.4 million for the asset.
