By Meghan Hall
Investor interest in office space in north San Jose has been pronounced as some of the region’s largest life sciences and tech companies have made North First Street home. Now, investors are turning their sights to residential, hoping to capitalize on job growth in a quickly emerging hub in the area. An affiliate of Palo Alto-based Pacific Urban Residential, Pacific Multifamily Investors, has purchased the 271-unit 251 Brandon at Riverview Apartments for $132.5 million, or just under $489,00 per unit, according to public documents. The seller was WTI Inc.
Public documents also indicate that Pacific Multifamily Investors assumed a $70.8 million loan, originally issued in July 2018 by Greystone, a commercial real estate lender. The story was first reported by The Mercury News Thursday.
The property, located at 251 Brandon St., features a variety of high-end community and apartment amenities. Individual units come equipped with gas ranges, designer carpeting, quartz countertops and patio or balcony. Community amenities include a barbecue area, clubhouse with tech lounge, coffee bar and conference center, covered parking, a fitness center with yoga and aerobics satellite studios, a pool and Wi-Fi in all common areas.
The units are a mix of one-bedroom/one-bathrooms, two-bedroom/two bathrooms, and three-bedroom/two bathrooms; the smallest apartments come in at around 594 square feet and cost about $2,600 per month, while the largest units can be close to 1,250 square feet and cost around $4,225 per month.
The complex is about equidistant from both downtown Santa Clara and downtown San Jose, and while development immediately surrounding 251 Brandon includes multifamily apartment complexes such as the River Terrace, Mansion Grove and Elan at River Oaks Apartments, North First St. has become a hotspot for tech companies looking for space. In recent months, Google has purchased several buildings along North First Ave., including 4550 N. First St., which it bought for $137.5 million in a transaction that also include 65 and Nortech Parkway from Trammell Crow. In March of this year, Chinese developer GZI North First acquired 2665 N. First St. for $41 million, or about $315 per square foot from New York Life Real Estate Investors.
At $132.5 million, the sale of the 251 Brandon at Riverview Apartments eclipses the largest multifamily sale of Q1, according to Kidder Mathews First Quarter Bay Area multifamily report. During the first few months of the year, Greystar completed the largest transaction of the quarter by purchasing the 220-unit Terra (Avana) complex in South San Jose for $80 million, or 363,636 per unit.
The report also notes that as unemployment remains low — in San Mateo County at 2.3 percent — major tech companies will continue to expand their footprint in the Bay Area and will continue to drive the need for multifamily housing. And, notes Kidder Mathews, as companies such as Airbnb are expected to go public, new influxes of capital will continue to drive investor interest.