(Save the date: RealShare Apartments comes to the Westin Bonaventure, Los Angeles, October 24.)
SACRAMENTO-Kennedy Wilson and its partners have acquired Capitol Towers, a 409-unit apartment community here for $64 million. Back in 2004, as GlobeSt.com reported, the asking price on the community was $55.2 million. The purchase was done with the help of $50-million in financing from HFF/Freddie Mac at 3.51%, fixed for seven years.
The Beverly Hills, CA-based firm will invest 50% of the equity in the deal. The acquisition increases the company’s multifamily portfolio to ownership interests in 13,876 units, including deals currently under contract.
According to Robert Hart, president of the firm’s multifamily management group, “The Capitol Towers acquisition is an exciting play on the Sacramento CBD market…The community is just a few short blocks from the Capitol Mall, the State Capitol and the light rail station, exemplifying Kennedy Wilson’s pursuit of higher density infill projects near a major transportation hub and job center that supports 100,000 office and government workers.”
Capitol Towers encompasses a four block area with 203 units in one 15-story tower and 206 villa units surrounding the tower. The villa portion is zoned for up to 1,290 units and the tower features six ground-floor retail units, providing residents with amenities that include groceries, dry cleaning and other conveniences. Additionally, a light rail stop is located adjacent to the property.
Kennedy Wilson plans to renovate the existing units with new kitchen cabinetry as well as other treatments and further enhance the project’s fitness center, leasing office and retail amenities. According to Meyers Research, market rents for Sacramento MSA increased 2.2% in 2011 and continued to improve by 1.0% in the first quarter of 2012. Additionally, REIS predicts a four-year cumulative rent growth of 32% for the MSA.
The firm isn’t only buying properties. In mid April, the firm sold two of its multifamily properties for a total of $154 million. Net proceeds of $64 million were to be distributed to the company and equity holders, including $18.5 million to Kennedy Wilson. The two properties include 360 Residences, a 213-unit luxury residential tower in San Jose, CA and Arbor Creek Apartment Homes, a 440-unit community in Beaverton, OR. At the time, the firm did not respond to GlobeSt.com queries as to reasons for selling.
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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.
