Bascom Pays $196K Per Unit for NorCal Apartments

LAFAYETTE, CA-Bascom Northwest Ventures has paid $196,000 per unit to buy a 30-year-old garden-style multifamily complex here, where the median home price in 2004 was more than four times that figure. The purchase, combined with a smaller complex here that it picked up last year, makes Bascom the largest apartment owner in the city. Jerry Fink, manging director of the Bascom Group, tells GlobeSt.com the company now owns 217 of the 611 units in the city that are in complexes of at least 50 units. The property is Lafayette Highlands Apartments, a 150-unit complex built in 1973 that is located on 8.2 acres at 1076 Carol Lane, off Mt. Diablo Boulevard near Highway 24. The seller was Lafayette Highlands LLC, whose managing member is Matteson Real Estate Equities Inc. TCI Properties of Redwood Shores brokered the transaction.The hilltop property has a unit mix of 11% one-bedroom, one-bath flats averaging 732 sf; 76% two-bedroom flats ranging from 902 sf to 1,023 sf; and 13% three-bedroom, two-bath flats averaging 1,280 sf. Amenities include a recreational building, pool, spa, fitness center, club room and dry saunas. Stratus Real Estate will manage the property.In explaining the purchase, Bascom’s managing director Brian Wirtz says Lafayette is one of the Bay Area’s highest income areas with a median priced home of approximately $850,000 in 2004 and only one new large scale apartment community (75 units) has been built in the market in last 25 years. “Lafayette Highlands offers the ultimate combination of virtually insurmountable barriers to entry, high income levels, high priced housing, excellent public schools and a great physical asset. Although the Bay Area apartment market has only recently stabilized and has not yet shown any significant increases in rental rates or occupancy, the competition for large, well located value added deals is intense.” Bascom’s acquisition director Court Durling was unavailable Friday for comment on, among other things, whether this is the highest per-unit price Bascom has paid for an apartment complex and what the price paid translates to in terms of a year-one cap rate. Last year, Bascom Northwest paid $8.5 million for Park Terrace Apartments, a 67-unit apartment complex in Lafayette that was constructed in 1964. Since getting its start in 2003, Bascom Northwest has spent $250 million acquiring 2,651 units in the Bay Area, Seattle and Salt Lake City. Bascom Northwest is the apartment affiliate of Bascom Group, a private equity firm formed in 1996.