SACRAMENTO—The region was the number one rental growth market in 2016 and is slated as a top-five projection for 2017. Much of this performance is a result of excellent job growth fundamentals, yet very low delivery of new housing inventory this cycle. Year over year rental growth exceeded 7%, according to Yardi Matrix and the Arden-Arcade neighborhood is expected to achieve double digit rent growth in 2017. Unemployment in the region has fallen to 5%, led by private sector growth in healthcare and technology.
A primary driver in quality investments is the healthy Sacramento housing dynamic, which was the case for Ridge Capital Investors LLC and an affiliate of Andell Inc. The joint venture acquired Sierra Fair Apartments, a 204-unit property for $22.35 million. Ridge has acquired more than $500 million of office and apartment properties in Northern California since 2012, and this is Ridge and Andell's third joint venture investment in Sacramento in the last three years.
Sierra Fair Apartments was originally developed in 1963 and is a well maintained 96% occupied property. The class-B property is situated in the southern Arden-Arcade submarket, a convenient in-fill, A-plus location near the region's most affluent housing communities, including Arden Park, Sierra Oaks and Arden Park Vista, as well as its most popular and trendy shopping centers.
In keeping with the newer high-end retail and lifestyle developments in the immediate area, Ridge plans a significant interior and exterior transformation of the property with the goal of making it one of the most sought-after places to live in the area. New amenities such as two clubhouses, outdoor entertaining areas and a fitness center are planned to upgrade the property.
“Sacramento is a very healthy multifamily market and we expect this trend to continue, given the low new supply coupled with better-than-average employment and income trends,” Trevor Wilson, managing director, Ridge Capital Investors LLC, tells GlobeSt.com.
Marc Ross of CBRE represented the seller of the property. FPI Management will provide management services for the partnership.
Ridge, a real estate investment and operating firm located in San Francisco, invests in multifamily and commercial properties throughout Northern California. Founded by Wilson and principals Brian Printz, Thomas Daniel and David Karol, the company focuses on opportunities where it can create value. The investment team has experience in more than $2.5 billion of real estate investment and development during the past 20 years.
Andell Inc. is a Los Angeles-based private investment firm with global business and investment interests. Andell's current activities include investments in public and private companies, real estate and partnerships with global investment managers. Its real estate platform seeks to generate risk-adjusted returns through a variety of investments across all asset classes, including portfolio and property acquisitions, joint and programmatic ventures, preferred equity, recapitalizations, operating companies, and debt and equity securities.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
