Location Skepticism Turns to Income for Bungalow Buyer

The asset is an attractive choice for renters because of its proximity to major employers.

SUNNYVALE, CA—With a healthy employment pace and overall demand for the area continuing to hum along, deals keep getting done, seemingly no matter the obstacle. Despite skepticism that a location fronting Interstate 101 could be appealing enough for a buyer, the overall draw of Silicon Valley once again won out in a recent multifamily disposition. The 68-unit Bungalows at Mathilda , a garden-style multifamily property, recently sold for $22.5 million, which equates to approximately $330,882 per unit. The seller was Interstate Equities Corporation (IEC) and the family investor/buyer was undisclosed. Adam Levin and Robert Johnston in Marcus & Millichap ‘s Palo Alto office represented the seller and procured the buyer. “At first, owners and agents were skeptical that this property could be sold at an acceptable price due to the fact that it fronts the 101 freeway,” said Levin. “We recognized the appeal of this asset that is driven by Sunnyvale’s strong employment fundamentals and low vacancy levels, and we were able to secure a qualified, local family investor to successfully exchange into the property. The asset is in a world-class location in the heart of Silicon Valley and is an attractive choice for renters on the Peninsula because of the close proximity to major employers, including Google and Apple ‘s new campus that is still under construction.” The Bungalows at Mathilda is located on approximately two acres of land and has 37,136 square feet of livable area. Upgrades include granite counters and breakfast bars, a new lighting package throughout, and new fixtures in kitchens and bathrooms within spacious existing floor plans. Levin tells GlobeSt.com: “IEC did a tremendous job over the past 18 months repositioning the asset through an extensive exterior and interior renovation of the property. They left approximately 30 units in their original condition which gave the new buyer an incredible opportunity to finish out the interiors and continue to grow the NOI. I believe that The Bungalows at Mathilda will continue to appreciate for many years to come.” In addition to exterior and interior renovations, the property includes many community amenities such as a swimming pool, barbecue area, private patios and vaulted ceilings in a number of units. There is ample storage and a laundry facility located on the property. “The Bungalows at Mathilda has undergone extensive exterior and interior renovations over the past year,” says Johnston. “Of the 68 units, 36 have been completely renovated with designer finishes, leaving tremendous opportunity to further increase rental income through the completion of renovations.”