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ROCKLIN, CA—TRI Commercial/CORFAC International president Tom Martindale, SIOR, recently revealed that John Gallagher, CCIM, CPM and managing director from his company's Rocklin office has sold two Northern California apartment communities for a total of $51 million.
Gallagher tells GlobeSt.com that despite the escalation in values for multifamily properties in the Bay Area, there is upside for investors that find the right opportunities to make “value add” improvements to apartment communities that have not had a substantial remodel in the last five or six years, increase rents and thus enhance the value of the asset.
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Gallagher represented Tomanek Group in the acquisition of the 208-unit, class A apartment community, Winsted at Sunset West. Winsted is located at 101 Copperville Circle in Rocklin, CA. Rocklin is a suburb of Sacramento and about 15 miles east of the state capital.
Winsted sold for $36 million and the seller in the transaction was The Hill Companies. Gallagher reports that the capitalization rate or expected first-year return for the buyer on the deal is 5%
Winsted was built in 2001 and is comprised of 13 two-story buildings on approximately 12.4 acres with one-bedroom, two-bedroom and three-bedroom apartment homes. Common area amenities include swimming pool, spa, fitness center, business center and covered parking.
Gallagher was the only broker involved in the $21.15 million sale of Seabreeze Apartments, located at 100 Larissa Lane in Vallejo, CA, a community in the northeast corner of the San Francisco Bay.
The Seabreeze seller was Tomanek Group and the buyer is a limited partnership headed by Jonathan Emami and David Beacham. Gallagher calculates that the going in Cap Rate is 6%. He reports that the buyer plans to remodel apartment interiors and make external improvements to the community as well, with the intention of increasing rental income.
Seabreeze has 184 apartment homes on about eight acres. The class B community was built in 1986 and renovated in 2006. It has 15 two-story buildings with one-bedroom and two-bedroom units. A gated community, onsite features also include a swimming pool and spa, a laundry facility and uncovered parking. A major benefit for Seabreeze residents is that the apartments are within a couple miles of the new Vallejo Regional Transit Center linking Vallejo and the North Bay to San Francisco, Oakland and Marin County via the San Francisco Bay Ferry system and bus service.
The new owners of Seabreeze assumed a Housing Assistance Payments (HAP) contract governing 38% of the Seabreeze units. HAP is the contract form of Section 8 housing assistance that is administered by the United States Department of Housing and Urban Development; it means that lower income, qualifying renters at Seabreeze may receive financial assistance to pay for a portion of their housing costs based on a HUD-sponsored study of market-rate housing costs in the region.
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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.
