(To read more on the multifamily market, click here.)
BELMONT, CA-Two adjacent apartment properties here, the 108-unit French Village and the 90-unit Normandy Square, have changed hands for $25.25 million, or about $128,000 per unit. Pacific Property Co. acquired the property with money partner Blackrock Realty. The seller was a private family that had owned the property for the past decade.
Pacific Property acquisitions VP Eric Schrumpf tells GlobeSt.com the acquisition of the 1970s-era complexes is a value-add play. The property had considerable vacancy and deferred maintenance when it changed hands in mid-to-late December, he says.
Going forward, the company plans to invest another $400,000 in the property, which works out to about $20,000 per unit. The money will be spent on a variety of things, says Schrumpf, including the roof, repaving the parking lot and unit upgrades.
"One of the attractive aspects of the deal was rents were relatively low to begin with," says Schrumpf. "We see potential to obtain an additional $100 per unit per month [in the near term] and additional $100 or so once we spend the money."
The properties, which will be renamed, are located along Old County Road within walking distance of Ralston Avenue and the Belmont CalTrain Station. Both assets are comprised of three-story buildings with common interior hallways. Amenities include swimming pools, elevators and covered parking.
The unit mix is 104 two-bedroom units, 70 one-bedroom units and 24 three-bedroom units. The average square footage per unit is about 900. Pinnacle will manage both properties for Pacific. Pacific was represented in the transaction by San Leandro-based Scott Edin & Associates.
Looking forward, Schrumpf says Pacific Property will close later this month on a similar sized apartment property also located in the Mid-Peninsula. The acquisitions are the second and third the company has made in the region since last spring, when it re-emerged in Northern California after a two-year hiatus.Pacific was an aggressive buyer in Northern California in its early years, acquiring over 3,000 units between 1998 and 2001. Following the economic decline in Northern California brought on by the demise of the dot-com industry and 9/11, Pacific moved its investment focus to Southern California. Late in 2004, Pacific made the call that the Northern California market had hit bottom, and began looking hard for additional acquisitions, both core and value-add deals. Pacific Property still owns about 2,000 units in the Northern California market.
Its first purchase after returning to the market was a core asset. The company paid $31-million last spring for the 124-unit Alexan Villa Del Sol Apartments in Sunnyvale. The seller, Trammell Crow Residential, completed the project in 2001. For GlobeSt.com's article on that acquisition, click here .
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