Vitus Acquires Sacramento Affordable Community
The buyer is planning $3.3 million in property renovations, with construction beginning in late 2022.
Vitus Group, in a partnership with the Foundation for Affordable Housing, has acquired River City Trio, a three-building, 55-unit affordable community in Sacramento, Calif. The transaction was financed with an $8 million Freddie Mac tax-exempt loan from Merchants Capital, in addition to revenue bonds from the Sacramento Housing and Redevelopment Agency. Vitus is also planning a $3.3 million renovation of the community, with construction beginning this month and expected to finish in late 2023. The firm will assume managerial duties for the community, alongside Aperto Property Management.
Fifty-three units in River City Trio are reserved for residents earning 60 percent or less of the area median income, with 10 percent designated for Americans with Disabilities Act-compliant housing.
True Craft Architecture will redesign the development, with MFRG Icon providing construction services. The renovations, which allocate $60,000 per unit, include kitchen and bathroom upgrades, new plank flooring, Energy Star-certified appliances and new HVAC and lighting systems. Vitus is also planning a number of exterior upgrades, including new roofing, painting, landscaping and street repairs, as well as providing the property with new security cameras. Renovations will include the construction of a new community room and leasing office, where residents will be provided with 520 hours per year of after-school and adult education services.
Sacramento’s affordable sector
The sale of River City Trio takes place as Sacramento’s multifamily sector adapts to a period of population decline, significant rent hikes and a shortage of affordable housing that plagues the nation. According to data from a July 2022 Yardi Matrix report, the city’s construction pipeline lags far behind the average completion rate, with 8,744 units under construction as of May. Of those, 1,830 are affordable, and the city has seen $500 million in transaction activity within the sector, the data shows.
Viewing Vitus’ acquisition in this context, Brooke Kim, director of development at Vitus told Multi-Housing News, “We view the purchase and renovation of River City Trio as preserving a scarce resource in Sacramento: affordable housing. Preserving existing affordable housing stock is an important measure to ensure the affordability crisis does not worsen.”
Another recent affordable transaction in the city is Avanath’s $182 million off-market purchase of a six-property, 1,032-unit portfolio located around the city.