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SAN JOSE, CA-Fairfield Residential has sold the Fairway Glen Apartments here for $25.2 million. The new owner is a joint venture of San Diego-based RedHill Investors LP, a value-add apartment investor making its first Bay Area investment, and institutional money partner Hanover Financial. The property is 98% leased.

The purchase price for Fairway Glen equates to $175,000 per unit and $211 per sf. The cap rate is 4.9% based current revenue. A source familiar with the acquisition tells GlobeSt.com that RedHill expects to pick up where Fairfield left off renovating units and then raising rents, which is expected to pull the cap rate up into the mid-5% range within a year or so. Arroyo & Coates partner Curtis Gardner and SVP Mark Leary had the disposition assignment.

RedHill is run by Russell Dixon, formerly national managing director for Insignia/ESG and, prior to that, head of CB Richard Ellis' multi-housing practice both domestically and abroad. In 2007, RedHill says it is targeting the acquisition of $350 to $500 million in assets throughout the Western US. The firm's typical acquisition of late has been older properties with value-add redevelopment potential.