(Read more on the multifamily market.)
EMERYVILLE, CA-Archstone-Smith has acquired the 261-unit second phase of the EmeryBay Club apartments here for $59.6 million. The seller was EmeryBay II Associates in affiliation with Bridge Housing Corp.
Built in 1993 at the foot of the Bay Bridge, the three-building development is approximately 94% occupied. Approximately 40% of the units are under rental restrictions. The average unit size is 820 sf. The market-rate units lease for $1,584 per month. The 20% designated for "low incomes" rent for $1,382 and the 20% reserved for "very low incomes" rent for $863 per month.
Mary Ann King and Brett Betzler of Moran & Co. had the disposition assignment. Betzler tells GlobeSt.com that the deal included the land beneath the three-building development, which the seller had heretofore been leasing from the City of Emeryville. The acquisition is a value-add play for the new owner, he says.
"When the property was built, Emeryville was an old industrial town; it has changed substantially in the last 10 years" Betzler says. "In just the last five years a new big outdoor mall has been built along with about 1,000 high-end condos, which is a significant change for a city that covers just 1.2 miles."
The area has also seen new apartment projects, including one across from EmeryBay Club with rents that are on average $400 per month higher than EmeryBay Club. Another new apartment project, atop the aforementioned mall, has rents that are $1,000 per month higher than EmeryBay Club. "So it's clear that people are coming in willing to pay more," he says.
The street address of EmeryBay Club is 6401 Shellmound St. The Martin Group sold the 425-unit first phase of EmeryBay Club in November 2005 for $106 million. The buyer, Port Kihei Investments, planned to invest an additional $12 million into the project and then sell off the units as condos for gross sale proceeds of $169 million.
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