Apartment Complex Trades at 5.7% Cap Rate

MILLBRAE, CA-Waterstone Millbrae, a 136-unit, 114,440-square foot multifamily property in this supply constrained San Mateo County market has changed hands for $33.78 million, according to Marcus & Millichap, which brokered the deal. Located 15 miles south of San Francisco, the property was built in 1971, was recently remodeled and is approximately 95% rented. The price equates to $248,400 per unit and $295 per rentable square foot.

The buyer assumed $23.77 million in combined first- and second-mortgage financing. The 10-year fixed-rate financing has a 30-year amortization, a blended interest rate of 5.7% and a loan-to-value of 70%. The capitalization rate for the new owner is 5.65% based on trailing three-month NOI, according to Marcus & Millichap, whose M&M Capital Corp. affiliate assisted the buyer with the financing.

The new owner is a private Bay Area family with an international connection that exchanged into the property, according to M&M. The county lists several related LLCs as the new owner: OR Property Holdings, MBOR Property Holdings, GOR Property Holdings and VOR Property Holdings. The agent for all of the entities is Marissa Reyes of 329 Alta Mesa Dr. in South San Francisco; she could not be reached for comment.