By Jon Peterson
Washington, D.C.-based AFL-CIO Building Investment Trust has made an $88 million equity investment into the development of the 395-unit MacArthur Commons apartment development in Oakland, according to sources the trust’s Web site. This development is being done with the Trust and Houston-based Hines.
The project has a very strong transit oriented location. It is located across the street from the MacArthur BART station. “This kind of a location should allow us to attract renters from a wide variety of employers. This would include parts of Oakland, downtown San Francisco, which is 15 minutes away, North Berkeley and the job center in Emeryville,” said Paul Paradis, senior managing director with Hines. He works out of the company’s regional office in San Francisco.
Hines declined to state the total development cost of the project. There has been a construction loan arranged with Northwestern Mutual Real Estate Investments for the development. This lender does have a regional office in San Francisco located at One Montgomery Street.
The demolition of the development has already started, and the site had been used as a parking lot for the BART station in the meantime. This is no longer needed as a parking structure for the BART station was built in another location. Hines has acquired the site from San Francisco-based Bridge Housing in an off-market transaction that involved no brokerage firms. Public documents show that an entity associated with Hines purchased the lot in December of 2016 for $17.2 million.
Hines figures that the development of a 395-unit apartment project will be started soon. “We are hopeful that the completion of the development will be finished by the first quarter of 2019 and the leasing of the apartment units will be started towards the end of 2018,” said Paradis.
The property will have 11 of the units in the project set aside as affordable units. There also will be 20,000 square feet on the ground floor that will be constructed as retail. This space will be leased by San Francisco-based Lockhouse Retail Group. The expectation is that the space would be leased to neighborhood retail that would serve a mixture of residents of the project, people that ride BART and other parts of the nearby community.
MacArthur Station will represent the first apartment development project in Oakland for Hines. It won’t be the last one. “We are now in the planning stages of our second project in Oakland. The site is located at 2270 Broadway in Oakland. The site is fully entitled and we are in the building drawings stage. Our plan is to hopefully started construction on the 225-unit development in the fall of this year,” said Paradis.
The equity partner on this development is Atlanta-based Invesco Real Estate who purchased the site in February of 2016 for $18.25 million from Lakeshore Partners. The site had already been approved for a 393,820-square-foot, 24-story building with 223 residential units and 7,800 square feet of ground-floor retail.
The 2270 Broadway project would be the second apartment development that Hines and Invesco have done together in the San Francisco Bay Area. The other is the 400-unit 33 Tehama project in San Francisco, which should be finished this year.