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$59M Buys New 426-Unit Apartment Complex

FOLSOM, CA-A Bay Area-based private investment company acquires the Falls at Willow Creek from Fairfield Residential for $138,500 per unit. One of the unusual things about the development is its density.

By Brian K. Miller | Updated on June 20, 2005

FOLSOM, CA-Fairfield Residential has sold the newly developed Falls at Willow Creek apartment complex here to Gerson Bakar & Associates, a Bay Area-based private investment company. The sale price for the 426-unit property was $59 million or $138,500 per unit.The Arroyo & Coates brokerage firm, which advised the seller, says the property received significant investor attention, in part because it is the newest multifamily development in a submarket with no new market-rate apartment communities in the immediate pipeline. In addition, more than 500 existing multifamily units in the area are potentially being converted to condominiums, according to the company.The Falls at Willow Creek consists of one-, two- and three-bedroom units in two- and three-story buildings on 33 acres. Each unit has a full-size washer and dryer, as well as individual hot water heaters and air conditioning. Community amenities include two pools, a business center, a game room and a fitness center. The average unit size is 916 sf and the average market rent is $1,221 per month.Arroyo & Coates brokers Curtis Gardner and Mark Leary were the advisors to Fairfield. Leary tells GlobeSt.com the property was completed last year and was 92% leased at the time of sale. He says the sale price represents a going-in cap rate of right around 5%. One of the unusual things about the community is its density, Leary says. At 13 units per acre, it is the lowest density multifamily development since 1998, he says. The density was a compromise in the approval process. The property was previously zoned for single-family residential. The upside is “it’s much more attractive to the tenant,” Leary says.

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