LA-based JRK Property Holdings has acquired Diamond Hillside, a 242-unit, garden-style apartment community in the San Francisco East Bay town of Pittsburg, Calif., for $52.85 million. The seller was a joint venture of McDowell Properties and Harbert Management Corp.
The property is located 29 miles east of Oakland along BART, and sits on 10 acres along California Highway 4 directly across from Los Medanos College, an 8,500-student community college.
While the property was originally built in 1985, Diamond Hillside has undergone various physical improvements in recent years. As of the sale, 114 of the units were completely updated with vinyl wood floors, new white shaker cabinetry, new hardware, plumbing fixtures and paint. Improvements have also been made to the pool and spa area, clubhouse and fitness center, and a new dog park, children’s playground and barbecue area were added.
The Buyer Plans More Upgrades
JRK plans to spend an additional $1.5 million to finish interior upgrades and modernize common areas. With the acquisition of Diamond Hillside, JRK’s Northern California portfolio now totals more than 2,437 units with assets in San Jose, Petaluma and Sacramento.
“Diamond Hillside is an example of an institutional-quality asset with investment upside in the San Francisco metro,” said James Bloomingdale, JRK senior vice president and head of acquisitions. He also pointed out that Pittsburg is “arguably the most affordable apartment submarket in the Bay Area.”
Median rents are 29 percent less than nearby Walnut Creek and about 40 percent less than those of the San Francisco metro, according to JRK. Even so, Pittsburg has experienced nearly 15 percent rent growth since 2015 and over 6 percent in the past year alone.
Mark Leary, Nate Oleson and Rob LeDoux in the San Francisco office of ARA/Newmark represented both parties in the transaction.