East Bay Multifamily Trades for $660K Per Unit

Rockwood Capital, based in San Francisco, acquired the 100-unit Arroyo Residences for $66M, which translates into $660K per unit. The seller was Northwestern Mutual Real Estate, a Wisconsin-based firm that acquired the property for $37.8M while it was under construction in 2015.

The complex, located at 1250 Arroyo Way, feature one- and two-bedroom units, with exceptionally large one-bedroom apartments measuring 900 SF. Amenities include a pool, spa, business center, clubhouse and rooftop terrace.

Rents at Arroyo Residences range between $3,341 and $3,816, which is well above the average rent in the East Bay suburb of $2,600, according to Zumper.

The $666K unit price for the Arroyo deal tops the previous high for a multifamily deal in the region. In January, a partnership of the Opportunity Housing Group and the California Statewide Community Development Authority bought the 484-unit Wood Creek Apartments in Pleasanton Hill for $304M, which translates into $628K per unit.

The Wood Creek acquisition was the largest yet for the partnership, which is developing affordable housing. The partners said they will reserve units at the Wood Creek complex for families making up to 80%, 100% and 120% of the median income in Pleasant Hill. Existing residents would not be displaced, the partners said.

In July, Gemdale USA secured a $94M construction loan to build a 189-unit multifamily in downtown Pleasant Hill, the first apartment project to be built in the downtown area in 30 years. Gemdale will replace a vacant office building on the site at 85 Cleveland Road, across the street from retail stores, restaurants and movie theaters.

Also in July, Walnut Creek-based Novin Development purchased the 71-unit Post Apartments at 1460 Contra Costa Blvd. in Pleasant Hill for $23M, or about $326K per unit.

Novin has given the City of Pleasant Hill a commitment to preserving the apartments has affordable rents. At the time of the purchase, monthly rents in Pleasant Hill were between $1,895 and $2,195, according to apartments.com.

In the last two years, apartment rents in the area have risen in tandem with the prices of single-family homes, which saw hikes of more than 40%. Novin said it would keep rates at the Post Apartments at or below the maximum level for what is deemed affordable, which is 80% of the city’s average income of $119K.