ROSEVILLE, CA–In an off-market transaction, Slate Creek at Johnson Ranch, a 612-unit apartment community, has been acquired for $100 million, according to Kennedy Wilson. The company and its equity partners invested an aggregate of $38.5 million of equity in the transaction (inclusive of closing costs), of which the company's initial share is approximately 12.5%. As part of the transaction, the company and its equity partners assumed $63 million of debt.
Kurt Zech, president of multifamily investments at Kennedy Wilson, tells GlobeSt.com: “Slate Creek fits perfectly into Kennedy Wilson's multifamily value-add acquisition strategy. We are targeting large value-add opportunities located in dense suburban submarkets with strong fundamentals. The Roseville submarket has seen very strong employment growth and home price increases, which are leading indicators of rent growth.”
Slate Creek is located at the entrance to Granite Bay, within an upscale residential neighborhood in Roseville, which has a median area home price of $715,000. The property is in close proximity to downtown Sacramento, catering to employees of nearby companies such as Hewlett-Packard, Kaiser Permanente, Oracle, Intel and Sutter Health Systems. The property last sold in May of 2011.
"Kennedy Wilson plans to invest nearly $10 million upgrading the property during the next five years in order to bring the property in line with some of the newer core assets in the market. The unique low density and park-like setting cannot be recreated in new construction and will always differentiate Slate Creek from the competition. The property is situated on a 39-acre site, which is nearly impossible to replicate in this submarket,” says Zech.
Year to date, Kennedy Wilson has acquired interests in 6,449 multifamily units in the west at an average cap rate of approximately 7%. With this acquisition, Kennedy Wilson's global multifamily portfolio totals more than 26,000 units.
Founded in 1977, Kennedy Wilson is a real estate investment and services company headquartered in Beverly Hills, CA, with 25 global offices. The company, on its own or with partners, invests opportunistically in a variety of real estate related investments, including commercial, multifamily, loan purchases and originations, residential, and hotels. Kennedy Wilson's real estate services include investment management, property services, auction, conventional sales, brokerage and research.
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Lisa Brown
Lisa Brown is an editor for the south and west regions of GlobeSt.com. She has 25-plus years of real estate experience, with a regional PR role at Grubb & Ellis and a national communications position at MMI. Brown also spent 10 years as executive director at NAIOP San Francisco Bay Area chapter, where she led the organization to achieving its first national award honors and recognition on Capitol Hill. She has written extensively on commercial real estate topics and edited numerous pieces on the subject.
