Cushman & Wakefield acted as exclusive advisor to FPA Multifamily with senior director Jason Parr leading the team that advised on the sale.

Parr said more than $3.6 million worth of interior and exterior improvements had been made to the property since March 2016. Rent premiums–as much as $190 per unit–have been achieved through the addition of washers and dryers to the majority of the one- and two-bedroom units.

“The improvements have resulted in effective rent growth of more than 11% during the past 12 months making this an attractive investment proposition to the buyer. Further, the property provides the ideal combination of a stable cash flow stream with the opportunity to significantly increase net operating income through a proven interior renovation strategy,” Parr said.

The Falls at Arden is located in a mature and high barrier to entry submarket. The majority of commercial and residential real estate in this submarket was constructed pre-1990, leaving effectively no land for large-scale high-density multifamily development. Furthermore, the planning environment is challenging to navigate, and entitlement and construction costs continue to rise. These factors combined make it difficult to build new in-fill residential projects within this submarket. Currently there are no new market rate multifamily projects planned or under construction in the submarket.

“Rent growth in Sacramento continued to rank number one in the nation for the past 20 months, likely continuing in 2018 because of lack of supply,” Parr tells GlobeSt.com. “Also, the downtown renaissance is driving rents to $3 a foot for Midtown multifamily. These are record levels and what is planned won't affect supply. And, record levels of value-add capital are leading to increased competition. You haven't seen this type of pricing as fundamentals are very strong.”