TODAY’S DEALS: Colliers Brokers Sale that Sets New Record in Marin County—$570 Per Sq. Ft.
Colliers International closes the sale of the 38-unit Casa Roja Apartments in Mill Valley, Calif.; and HFF arranges $57 million in takeout financing for a property in downtown Denver.
Mill Valley, Calif.—Colliers International recently closed the sale of the 38-unit Casa Roja Apartments in Mill Valley, and in the process set a new record for price paid per square foot for a multifamily asset, company officials have reported.
The sale price for the property equates to approximately $570 per square foot, a new record for a multifamily property (five+ units) in Marin County. The in-place cap rate was in the low 4 percent range, according to Colliers Vice President Ryan Wagner who, along with the firm’s Brad Lagomarsino and James Devincenti, represented the property owner, Red Island Real Estate LLC.
The 38-unit Casa Roja Apartments was originally built in 1964 and extensively renovated over the last 18 months. The property boasts a large central pool terrace, laundry facilities and some of the most elegant interiors of any rental product in the region. The property is located just 10 minutes from the Golden Gate Bridge in southern Marin County, and residents benefit from one of the best school districts in the entire state.
“This property generated tremendous interest from private and institutional investors, which just reinforces the demand for premium multifamily properties in the Bay Area and, specifically, in Marin County,” said Wagner. “There is a dearth of multifamily product in Marin County, with home prices simply out of the reach for so many, demand for the few Class A apartments in this area has dramatically jumped over the past few years and this is the perfect example.”
The buyer of the property was Woodmont Companies, a diversified real estate investment and management organization headquartered in Belmont, Calif. Since its founding in 1963, the company has been involved in the acquisition, development and management of income properties exceeding $5 billion in valuation.
The seller of the property was Sausalito-based Red Island Real Estate LLC (RIRE), long known in the Bay Area for acquiring what it terms “irreplaceable assets” and then embarking on a program of improvements and renovations to bring them up to Class A standards, which is what it was in the process of doing when it sold the property. Red Island LLC has received awards from Los Gatos, Mountain View and Belmont for its design and community improvement. The new buyer plans to continue to improve the property.
In what he called “typical” Red Island fashion, the company’s managing partner, Jim Ebert, said the partnership first acquired the property because it fit its typical profile: an exceptional and rare multifamily asset in an area where few such projects exist, an excellent location for commuters into the City, outstanding area schools and a high standard of living.
Renovations completed to date have been comprehensive and have included such major changes as all new flooring, new windows, roof replacement, the reconstruction of all common area hallways, a new entry, plaster coating on all common area walls and ceilings, new heating and air conditioning units and new kitchens and bathrooms. According to Wagner, residents in Mill Valley and Southern Marin are accustomed to paying rents that are commensurate with San Francisco pricing, approaching $4 per square foot.
“The citizens of Marin County have been consistently clear about not wanting additional, high-density housing developed in their neighborhoods, but of the projects that do exist there, they also have demanded that they be of high quality and style,” said Ebert. “That combination created the perfect environment for what we do. In fact, we were most proud that almost half of the residents who lived at the property before we purchased it still live there today; it is important to us not to displace residents who call our properties home.”
According to Wagner, “This property provides an excellent opportunity for Woodmont to continue the renovation and improvements, and further establish itself as one of the preeminent apartment communities in Southern Marin County.”
HFF arranges $57M takeout financing for property in downtown Denver
Denver—HFF announced that it has secured $57 million in financing for One City Block, a newly built, 302-unit, Class A multi-housing community in downtown Denver.
Working on behalf of RedPeak Properties, HFF placed the fixed-rate loan with Cornerstone Real Estate Advisers LLC acting on behalf of an institutional client. The loan proceeds will be used to replace the borrower’s existing construction loan.
One City Block encompasses a full city block bounded by East 19th Avenue to the north, Pennsylvania Street to the east, East 18th Avenue to the south and Logan Street to the west in downtown Denver’s Uptown neighborhood. Completed in January 2014, the property includes 207,598 rentable square feet of residential space and 10,035 square of ground floor retail. The four-story, LEED-certified property stabilized in less than a year and is 95 percent leased. One City Block has a mix of studio, one- and two-bedroom floor plans and amenities including a lap pool with sun deck and hot tub, grilling areas, fire pit, sport court with practice putting green, four rooftop terraces, fitness center, yoga studio, game room with ping pong and pool table, demonstration kitchen, onsite bike repair shop and pet spa.
“This refinancing was a very pleasant experience for our organization. HFF provided RedPeak with a wide range of very competitive options, and Cornerstone was terrific to work with. We look forward to doing more business with both parties in the future,” said Mike Zoellner from RedPeak Properties.
The HFF team representing the borrower was led by senior managing director Eric Tupler, Managing Director Josh Simon and Analyst Leon McBroom.