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Condo Converter Buys Essex Property

SAN RAMON, CA-Essex Property Trust, an apartment REIT based in Palo Alto, sells the 188-unit Eastridge Apartments for $47.5 million and places five additional properties on the market as condominium conversion plays.

By Brian K. Miller | Updated on June 21, 2005

SAN RAMON, CA-Essex Property Trust Inc. has sold the Eastridge Apartments here for $47.5 million. The Palo Alto-based apartment REIT sold the 188-unit garden-style complex to a buyer whom it would not name but says plans to convert the property to condominiums.Essex acquired Eastridge Apartments in 1996 for $19.2 million and since that time has invested an additional $1 million in the property, according to its most recent annual report. In conjunction with the sale, an affiliate of Essex originated a participating loan to the buyer in the amount of approximately $2.2 million, allowing the company to financially participate in the conversion.Essex says it is the third apartment property it has sold recently to a condo converter, and it won’t be the last. The company recently listed five additional apartment communities for sale that have “condominium conversion potential.” All of the assets are located in Southern California. The include the 132-unit Trabuco Villas in Lake Forest; the 100-unit Capri at Sunny Hills in Fullerton; the 296-unit Pathways in Long Beach; the 120-unit Bonita Cedars in Bonita; and the 224-unit Bluffs II in San Diego.”Persistent housing shortages in many of Essex’s West Coast markets have led to dramatic increases in the median price of for-sale housing,” says Essex chief executive Keith Guericke in a prepared statement. “This has resulted in significantly higher valuations for properties with condominium conversion potential as compared to apartment communities.”Essex on Tuesday could not provide GlobeSt.com with the names of the brokers involved in the Eastridge sale or the ones involved in marketing the additional apartment complexes for sale. The information was not otherwise immediately available.

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