SACRAMENTO—The Fountains at Point West is a 339-unit value-add multifamily property located at 1761 Heritage Lane in the Arden-Arcade submarket, across the street from the Arden Fair Mall and Kaiser Permanente's Point West Campus. The asset recently sold for $85.15 million to Salt Lake City-based Bridge Investment Group.
"This marks the first significant multifamily sale to occur in Sacramento since the COVID-19 pandemic hit, which is a testament to the property's status as a landmark asset in the region," says Marc Ross, executive vice president in the CBRE Sacramento office, who represented the San Rafael-based seller, Oakmont Properties.
The property, which was built in 1974, underwent substantial exterior renovations including new roofs, complete exterior residing, replacement of balconies and stair towers, elevated walkways, installation of dual pane windows, exterior paint, landscaping, and an upgraded fitness center and clubhouse. Oakmont Properties fully renovated 23 units, allowing Bridge Investment Group to benefit from renovating the remaining units and revitalizing vacant community spaces.
"Fountains is one of the more prominent multifamily assets in the region, with unique physical qualities that distinguish it from a typical apartment property," Ross tells GlobeSt.com. "While the COVID-19 pandemic presents some obvious near-term challenges, the long-term prospects of the asset remain stellar, particularly the upside related to unit interior upgrades. The significant opportunity, along with falling mortgage rates, helped propel the transaction forward during this brief period of uncertainty."
The property includes studios, one-, two- and three-bedroom floor plans. Community amenities include a 12,000-square-foot clubhouse, a theater room, a multi-story fitness center with racquetball courts, three pools and spas, multiple waterways and fountains, a shaded barbecue area, three tennis courts and a basketball court, underground garage parking, and elevators serving the three-story buildings.
While the outlook is somewhat uncertain at this point, it is important to note that solid multifamily fundamentals that were in place prior to mid-March, according to a recent Colliers report. Market occupancy remains well above 96% and sale prices increased 37% year-over-year. Average market rents continue to increase around 4% per year.
While construction activity continues to increase with nearly 3,000 units under construction, future development starts are likely to be delayed. Landlords are concerned about potential falling rent collections as a result of job losses throughout the region, but rents collected in April surpassed expectations, says the report.
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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.
