SANTA ROSA, CA–The largest apartment community in the city, Maribelle Apartment Homes, has sold to TruAmerica Multifamily in partnership with Intercontinental Real Estate for $59 million. This is also the partnership's largest acquisition in the Bay Area. The transaction represents TruAmerica's fifth joint venture encompassing almost 1,300 units with Intercontinental.
Greg Campbell, senior managing director of acquisitions for TruAmerica tells GlobeSt.com: “We found the opportunity to acquire the largest multifamily asset in the red-hot Santa Rosa submarket to be too attractive to pass up. The compelling location near the lively downtown shopping and dining venues, coupled with significant value-add upside through a targeted renovation, made the acquisition opportunity a no-brainer."
Built in 1987, the 287-unit garden-style apartment community features a mix of one- and two-bedroom apartment homes on a low-density 13.4-acre site and includes a clubhouse fitness center, resort-style pool, dog park and picnic areas with barbecues. The property has easy access to US 101 and California State Highway 2 and is near the soon-to-be-completed Santa Rosa Station of the Sonoma Marin Rail Transit Service. It is within walking distance to the historic Railroad Square and downtown districts, and within a three-mile radius of 2.5 million square feet of retail, dining and entertainment options.
San Francisco and the Peninsula have experienced 46 percent and 50 percent respectively in rent growth during the past four years, according to Real Facts. This has put additional upward pressure on rents in outlying areas. In Santa Rosa, rents have increased approximately 28% during the same period.
“Unlike many large cities where economic growth is limited to a particular area, the Bay Area is continuing to experience strong economic fundamentals across an entire region which stretches more than 100 miles from San Jose to Santa Rosa," says Campbell.
Rents should continue to climb in Santa Rosa, which already boasts an average rental occupancy rate of 97%, as there is very little product in the pipeline. According to Marcus & Millichap's Institutional Property Advisors, which marketed the property on behalf of Fairfield Residential, construction of new apartment inventory has been limited due to the city's historically controlled growth approach to residential development. Approximately 70% of the city's 6,600 units were built before 2000.
“At our cost basis, we will be able to upgrade the property while still keeping rents in line for working class families,” added Jessica Levin, director, acquisitions for Intercontinental.
TruAmerica's investment will benefit from a seven-year, interest only, fixed rate agency loan originated by Brian Eisendrath and Cameron Chalfant at CBRE Capital Markets Inc. TruAmerica specializes in identifying, acquiring and repositioning mid-tier apartment communities to provide high-quality rental housing for working families in growth markets throughout the west. Since acquiring its first asset in San Jose in 2013, the Los Angeles-based investment firm has become one of the most actives buyers of multifamily properties in the United States, building a portfolio of nearly 19,000 units including more than 1,000 in the Bay Area, with an overall value of $3.8 billion.
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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.
