1,008-Unit Apartment Complex Trades for $114M-Plus

RICHMOND, CA-The 1,008-unit Hilltop Bayview Apartments here have changed hands for $114.5 million or about $113,600 per unit. General Electric subsidiary Watch Holdings LLC sold the 42-building, 50-acre complex to a joint venture of Newtown Square, PA-based GHM Associates Inc. and Fidelity Real Estate Group. The transaction represents one of the largest apartment complex to transfer ownership in California since 1999, according to Marcus & Millichap, which had the disposition assignment.Built in 1988, the garden-style Hilltop Bayview Apartments complex is located near Interstate 80, about 20 miles northeast of San Francisco and 15 miles north of Oakland. The complex is currently 87% occupied. Amenities include a clubhouse, five swimming pools (one indoors), a fitness center, sauna, four lighted tennis courts, a racquetball court, covered parking, controlled access and on-site management. The new ownership says it plans to invest an additional $8 million in the asset to reposition it as a class A asset in the market. Planned improvements include extensive unit renovations, a new fitness center and security upgrades.The M&M disposition team included senior director Stan Jones, vice president Kevin Turner and associate Phil Saglimbeni. Neither Jones nor a GHM executive could be reached Wednesday afternoon for comment. In a prepared statement, Jones and his team members say housing prices have continued to soar since 2000, new supply of rental projects has slowed, and replacement costs have risen to more than $200,000 per unit. “We are seeing tremendous capital flow into the Northern California market from investors who are positioning for a strong recovery,” Jones says. “Given the extremely high barriers to home ownership, rental apartments are increasing in demand and should be well positioned for the future.”GMH Associates is a private real estate investment company targeting approximately $300 million in new value-add acquisitions over the next 12 months in the Mid-Atlantic region, Florida and California markets. GMH Associates is an affiliate of GMH Capital Partners, third-party provider of investment sales and asset management services.