FREMONT, CA—With close proximity to Tesla, a multifamily property with potential becomes an investment diamond in the rough for one instinctive investment group. That company, Trion Properties, recently acquired the 88-unit multifamily property located at 4445 Stevenson Blvd. for $26.5 million.
Trion will strategically renovate the apartment community to stabilize the asset and increase net operating income. The firm will also rebrand the property, currently known as Americana Apartments, as Parc 88. This is the firm's fifth Bay Area acquisition in less than two years, bringing its portfolio in the area to 350 units, according to Max Sharkansky, managing partner at Trion Properties.
“Fremont is experiencing tremendous growth,” says Sharkansky. “The market benefits from the expansion of the technology sector as companies are moving across the Bay into this submarket.”
The apartment community is located less than five miles from the Tesla facility, which currently employs more than 6,000 people and occupies 5.3 million square feet.
“The Fremont City Council recently approved a 4.6 million-square-foot expansion of the Tesla factory, which is predicted to bring 3,100 new workers to the area and further drive demand for quality housing in this submarket,” continues Sharkansky. “We most recently acquired a 146-unit multifamily property in San Leandro in April. We continue to see deep value throughout the region and plan to further expand our portfolio throughout the East Bay.”
Sharkansky also notes that the extension of the BART, planned to be completed next year, will more effectively connect the East Bay and Silicon Valley, further driving demand for multifamily housing in the area.
“This asset was a rare find, as it was well maintained for its vintage while presenting huge upside potential,” says Sharkansky, who notes that the property was owned by the same family since its construction in 1966. “Our previous experience in the area and property management platform will allow us to reposition this apartment community into a competitive complex that will improve our residents' quality of life and result in favorable returns.”
After upgrades, the units will cost approximately $900 to $1,000 less than new construction units per month, making it attractive to the workforce moving to the area, and resulting in strong occupancy and stabilized cash flow, notes Sharkansky. Interior renovations will include the installation of flooring, quartz countertops, updated cabinetry and washer/dryer appliances in each unit. Exterior renovations include updating the apartment's signage, adding a gym and cabanas by the pool, and investing in landscaping the asset's 4.4 acres of green space.
“The East Bay market is experiencing explosive growth as both businesses and residents are relocating to San Francisco's outlying submarkets in search of lower costs,” Sharkansky tells GlobeSt.com. “By repositioning distressed 'diamond-in-the-rough' assets, we can provide high-quality housing that serves as a strong value alternative to residents, while also generating risk-adjusted returns to investors.”
Continental Partners arranged a $19.75 million bridge loan for this acquisition and $10.75 million of joint venture equity for the asset. Shivu Srinivasan of NAI Capital represented Trion Properties as the buyer and Victor Makras of Makras Real Estate represented the seller, the Jones Family, in this 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.
