SAN JOSE, CA-A Forest City Enterprises Inc. subsidiary has closed the sale of 101 San Fernando, a 323-unit apartment community in San Jose, CA, to a subsidiary of Palo Alto, CA-based Essex Property Trust Inc. The gross sale price was $59.6 million, representing a cap rate of approximately 5%, based on trailing 12-month net operating income.
Forest City expects to realize net proceeds from the transaction of approximately $15 million, according to a prepared statement. “This transaction is a great example of selectively taking advantage of opportunities to capture value and generate liquidity from our portfolio,” says Charles Ratner, Forest City president and chief executive officer in a prepared statement.
Ratner adds that Forest City also worked with the buyer in late 2005 on the sale of Enclave, another San Jose-area apartment property.
“We believe strongly in the Northern California market and have a meaningful presence and asset base in the region,” he says. “We continue to invest in new development and new opportunities, particularly in the Bay area.”
The apartment community was built in 2001 and is composed of 16 five-story buildings with a variety of studios, one-bedroom, two-bedroom, and three-bedroom units. All units feature nine foot ceilings and washers and dryers. Community amenities include a fitness center, lounge, business center and courtyard spa.
The property is financed by $35.2 million in tax exempt bonds. Essex Property Trust has entered into a three-year total return swap whereby Essex will pay interest based on a variable interest rate equal to the SIFMA Index, which is currently at 0.25%, plus 150bps.
Essex Property Trust also recently acquired Eagle Rim Apartments, a 156-unit community located in Redmond, WA for $18.6 million. Keith Guericke, president and CEO of Essex Property Trust, says that “these recent acquisitions demonstrate our ability to source accretive deals located in markets we believe will provide attractive external growth moving forward. We are well on our way to meet or exceed our goal of $300 million in acquisitions in 2010.”
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
