Kennedy Wilson JV Spends $176M on San Jose Community
The property sold for just $1 million more than it did in 2020.
Kennedy Wilson, Hulic Co. Ltd. and Fuyo General Lease Inc. have formed a joint venture to acquire One South Market, a 312-unit luxury community in downtown San Jose, Calif., for $176 million.
The previous owner, Lakevision Capital, had purchased the property six years ago for just $1 million less from Essex Property Trust, Yardi Matrix data shows. Jones Lang LaSalle originated a $87.5 million, CMBS acquisition loan at the time, which will mature in 2030.
San Jose multifamily sales that closed in the 12 months ending in September totaled $3.3 billion, according to Yardi Matrix information. More than 6,500 units across 34 properties traded in the metro, with the average per-unit price reaching $476,080.
READ ALSO: San Jose, Among The Top 10 Markets for Multifamily Transactions
The market witnessed significant year-over-year investment growth. During the same period last year, transaction volume amounted to only $2 billion, involving 20 properties and 5,500 units, same data provider shows. The average price per unit was also lower, clocking in at $402,471.
A luxury community in downtown San Jose
One South Market came online in 2015 at 1 S. Market St., in a Opportunity Zone and Difficult Development Area. The 23-story building is just off California State Route 87 and across from San Pedro Square Market. Multiple dining, transit and entertainment options, including the San Jose Museum of Art, are within walking distance.
The unit mix at One South Market includes one- to three-bedroom and penthouse floorplans ranging from 510 to 2,030 square feet. All apartments have floor-to-ceiling windows, central air conditioning and smart thermostats.
Shared amenities at the pet-friendly community feature a fitness center, business center, clubhouse, barbeque area, swimming pool and spa. Motorcycle parking, bicycle parking and EV charging stations are also available. The LEED Silver-certified tower also comprises two floors of parking and retail.
Kennedy and Hulic’s partnership history
CBRE’s Senior Vice President Jon Teel arranged the current deal on behalf of the buyer. The transaction marked Kennedy Wilson’s fifth joint venture with Hulic Co. and the first with Fuyo General Lease Inc.
Kennedy and Hulic first partnered in the summer of last year, when the duo joined forces with Kenedix Inc. and acquired The Danforth, a 256-unit community in Seattle, for $173 million. At the time, Kennedy provided $6.6 million in equity for a 10 percent interest in the property.
The most notable of their transactions, however, closed a few months ago. In July, the two partners bought the 421-unit Carraway in West Harrison, N.Y. for $237 million, also alongside Kenedix. Toll Brothers, the seller, had completed the multifamily development in 2021.
