Lack of Multifamily Supply, Discounted Caps Give Sacramento an Edge
Landing at College Square offered buyer MG Properties a suburban, newer construction opportunity located near major employers and multiple transit options at pricing below replacement costs.
SACRAMENTO—The Landing at College Square, a 270-unit multifamily property, recently sold for $64.75 million. San Diego-based MG Properties purchased the property.
Marc Ross of CBRE’s Sacramento office represented the seller, San Rafael-based Oakmont Properties.
“Landing at College Square offers MG Properties a suburban, newer construction opportunity located near major employers and multiple transit options at pricing below replacement costs,” says Ross.
Built in 2017, the class-A property is adjacent to Elk Grove, CA and sits within six miles of a high-profile tech company as well as a few miles away from a handful of prominent healthcare employers. Located at 7640 West Stockton Way, Landing at College Square is close to Interstate 99, Interstate 5, Interstate 80 and Highway 50, with regional transit located a half mile away.
Brian Eisendrath and Cameron Chalfant of CBRE’s West Los Angeles office coordinated MG Properties Group’s assumption of the existing Freddie Mac loan.
According to CBRE’s fourth quarter 2019 multifamily report, Sacramento reported one of the nation’s highest gains in multifamily rent growth with 4.8% annual growth year-over-year. Additionally, lack of supply is driving values and demand in the Sacramento market, says Ross.
“A lack of apartment supply and while we’ve seen cap rates compress over the last few years, in Sacramento, cap rates continue to represent a discount to other major West Coast markets,” he tells GlobeSt.com. “Additionally, home prices have quietly grown twice as much in the past 10 years, making the jump to home ownership even less achievable for many renters as the cost differential between owning and renting as well as the down payment requirements have grown.”