Sequoia Equities Fairways, a Walnut Creek-based investment partnership, sold the Fairways at 12801 Fair Oaks Blvd. to Lyon Oak Creek of Southern California. Stanford Jones, vice president of investments with Marcus & Millichap Real Estate Investment Brokerage Company¹s Palo Alto office, and Ken Blomsterberg, senior investment associate in the Sacramento office, had the exclusive listing to market the property.

Reflecting Sacramento¹s super-heated market, the sale pencils out to about $66,824 per unit, even higher than the $63,500 average for the area in 2002 -- itself a dramatic increase from 2001.

Vacancy rates are expected to continue to edge up and cap rates will flatten in 2003. But last year was a seller¹s market, with nearly $700 million in volume ‹ and 2003 should continue to be formidable as take profits from a ready supply of willing buyers, according to a CB Richard Ellis market outlook by Charles DeLoney, senior vice president and co-director of the Sacramento Multifamily Property Group.

The cap rate for the Fairways sale was a solid 8.6%, according to the M&M brokers."During the escrow period, another qualified party offered the buyer $2 million to sell his position," Blomsterberg says. "The buyer declined the offer based upon the upside potential he sees in the property. In the midst of a slowing economy, the demand for solid class B product in Sacramento remains strong."

The property was built in 1988 and extensively refurbished in 2000. Part of the refurbishment was reportedly due to a major mold problem. The garden-style complex consists of 475,352 rentable sf on 26.4 acres near the ninth hole of the Sunrise Golf Course.

The unit mix includes 364 one-bedroom/one-bath and 272 two-bedroom/two-bath designer apartments with rental rates ranging from $626 to $950 per month. Amenities include a clubhouse with leasing office, kitchen, lounge and fitness center, three outdoor swimming pools and spas, racquetball and volleyball courts, a children's playground, two saunas and a putting green.

Only three transactions in 2002 exceeded the Fairways in dollar value. A year ago, Sobrato Development Cos. of Cupertino purchased the 612-unit Slate Creek at Johnson Ranch in Roseville from Trammell Crow Co. for $53.5 million. The 796-unit Tameron Ranch property sold for $53 million during the year, and in October, Demmon Haverhill Partners LP, a private entity, acquired Haverhill at Highland Reserve, a 400-unit community, from Fairfield Highland Reserve LP for $45.4 million.