SAN LEANDRO, CA—Rents throughout the Bay Area are continuing to rise, which is driving tenants to the surrounding submarkets. This significant increase in rents is affecting demand throughout the Hayward and San Leandro markets, and two multifamily acquisitions are prime examples of this uptick.
Trion Properties, a Los Angeles-based boutique private equity firm, has acquired a 38-unit complex in San Leandro, CA and 30-unit apartment community in Hayward, CA. The two acquisitions add $13.58 million to Trion Properties' portfolio of more than $100 million in assets under management.
Hayward and San Leandro rents are roughly 35% less than asking rates in the more expensive surrounding submarkets, according to Trion. The firm anticipates high tenant demand which, combined with its aggressive lease-up and renovation strategy, will drive strong cash flow, as well as rates of return in excess of 30%.
Max Sharkansky, managing partner and co-founder of Trion Properties, tells GlobeSt.com: “The Bay Area continues to be a mecca for strong employment growth. This continued growth is driving long term demand throughout the region. Both the San Leandro and Hayward acquisitions are located within minutes of rejuvenated downtowns, offer convenient access to great transit options including BART, and are centrally located to provide short commutes to jobs in San Francisco, the Silicon Valley and other areas of the East Bay.”
Debt for both transactions was arranged by Los Angeles-based Continental Funding Group, with a 70% loan-to-cost floating rate loan that has an interest rate of 3.5% over LIBOR.
Trion Properties and joint-venture partner, Holualoa Companies, acquired the San Leandro apartment complex located at 348 Estabrook St. Trion and Holualoa plan to invest approximately $1 million in renovations into the property, which include installing vinyl wood plank flooring, quartz kitchen countertops, stainless steel appliances, modern cabinets, new light fixtures and smart locks.
The property offers immediate access to BART stations, the Oakland International Airport and the San Leandro Technology Campus, a 500,000 square-foot campus of connected office space adjacent to the BART station. The tech campus will bring an estimated 1,800 jobs to San Leandro, thereby driving exponential economic growth in the next few years.
“The acquisition of this apartment complex strongly aligns with our strategy of investing in underperforming multifamily properties, then repositioning them through high-end renovations to increase our net operating income and maximize investor returns,” says Farhan Mahmood, director of acquisitions at Trion Properties. “With our in-house property management team and fully built-out operator platform, we will perform upgrades to the common areas and improve the property's amenities to stabilize the asset, creating an institutional quality product with a boutique feel.”
Eduardo Vergara at Marcus & Millichap represented Trion in the transaction.
The Hayward apartments are located at 23924 2nd St. The property offers convenient access to two BART stations, an Amtrak station, and the San Francisco International Airport, providing tenants with a variety of options for commuting to work or travel. Downtown Hayward has recently undergone a rejuvenation with a $105 million, 6-mile renovation called the Hayward Loop, which has reduced commute times and has refurbished the city's downtown by adding trees and street art, and upgrading storefronts.
Trion Properties plans to invest approximately $713,000 in renovations which include installing vinyl wood plank flooring, quartz kitchen countertops, stainless steel appliances, modern cabinets, new light fixtures, and smart locks to revitalize the interior of each unit.
Tom Hyman at Highland Investment Properties Inc. brokered the transaction.
SAN LEANDRO, CA—Rents throughout the Bay Area are continuing to rise, which is driving tenants to the surrounding submarkets. This significant increase in rents is affecting demand throughout the Hayward and San Leandro markets, and two multifamily acquisitions are prime examples of this uptick.
Trion Properties, a Los Angeles-based boutique private equity firm, has acquired a 38-unit complex in San Leandro, CA and 30-unit apartment community in Hayward, CA. The two acquisitions add $13.58 million to Trion Properties' portfolio of more than $100 million in assets under management.
Hayward and San Leandro rents are roughly 35% less than asking rates in the more expensive surrounding submarkets, according to Trion. The firm anticipates high tenant demand which, combined with its aggressive lease-up and renovation strategy, will drive strong cash flow, as well as rates of return in excess of 30%.
Max Sharkansky, managing partner and co-founder of Trion Properties, tells GlobeSt.com: “The Bay Area continues to be a mecca for strong employment growth. This continued growth is driving long term demand throughout the region. Both the San Leandro and Hayward acquisitions are located within minutes of rejuvenated downtowns, offer convenient access to great transit options including BART, and are centrally located to provide short commutes to jobs in San Francisco, the Silicon Valley and other areas of the East Bay.”
Debt for both transactions was arranged by Los Angeles-based Continental Funding Group, with a 70% loan-to-cost floating rate loan that has an interest rate of 3.5% over LIBOR.
Trion Properties and joint-venture partner, Holualoa Companies, acquired the San Leandro apartment complex located at 348 Estabrook St. Trion and Holualoa plan to invest approximately $1 million in renovations into the property, which include installing vinyl wood plank flooring, quartz kitchen countertops, stainless steel appliances, modern cabinets, new light fixtures and smart locks.
The property offers immediate access to BART stations, the Oakland International Airport and the San Leandro Technology Campus, a 500,000 square-foot campus of connected office space adjacent to the BART station. The tech campus will bring an estimated 1,800 jobs to San Leandro, thereby driving exponential economic growth in the next few years.
“The acquisition of this apartment complex strongly aligns with our strategy of investing in underperforming multifamily properties, then repositioning them through high-end renovations to increase our net operating income and maximize investor returns,” says Farhan Mahmood, director of acquisitions at Trion Properties. “With our in-house property management team and fully built-out operator platform, we will perform upgrades to the common areas and improve the property's amenities to stabilize the asset, creating an institutional quality product with a boutique feel.”
Eduardo Vergara at Marcus & Millichap represented Trion in the transaction.
The Hayward apartments are located at 23924 2nd St. The property offers convenient access to two BART stations, an Amtrak station, and the San Francisco International Airport, providing tenants with a variety of options for commuting to work or travel. Downtown Hayward has recently undergone a rejuvenation with a $105 million, 6-mile renovation called the Hayward Loop, which has reduced commute times and has refurbished the city's downtown by adding trees and street art, and upgrading storefronts.
Trion Properties plans to invest approximately $713,000 in renovations which include installing vinyl wood plank flooring, quartz kitchen countertops, stainless steel appliances, modern cabinets, new light fixtures, and smart locks to revitalize the interior of each unit.
Tom Hyman at Highland Investment Properties Inc. brokered the transaction.
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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.
