A Concord mobile home park with 178 spaces has sold for $9.3 million to a private apartment investor looking for yield.
Joel Kelly, a principal with Oakland’s Bay Apartment Advisors, said more than two dozen investors expressed an interest in 1080 San Miguel Road and six offers were made. The buyer, who owns a large apartment portfolio in the Bay Area, achieved an 8 percent capitalization rate.
“Investors are out there looking for returns. The entity that bought it is an apartment owner, and they are stepping into a territory that they had not gone before,” Kelly said. “There is a lot of money out there to be placed for projects like this.”
The buyer paid all cash. The property was originally listed for $9.8 million. The previous owners bought in the late 1970s. Sixty-eight of the units are subject to the city of Concord’s rent-control ordinance.
The property would have sold for more, but the units are a mix of tenant-owned and park-owned. The park-owned units, which require upkeep and maintenance, pull the price per unit lower, Kelly said.
The park’s 15 contiguous acres next to a BART line seem an obvious target for redevelopment, but not so—at least for now. “Everyone has investigated what it would cost to build on it,” Kelly said. “But the cost of construction and building are so high that the current use is the best use.” Still, he said, the buyer liked that the transaction included a large site.
“When land becomes very scare, it may become a massive apartment building,” he said.