Fairfield Residential Purchased the Asset for $27,000,000
Citrus Heights, CA (March 3, 2015) — ARA, A Newmark Company, today announced the sale of a 206 unit Class B apartment community located in Citrus Heights, CA. Now named Atwood, the property was previously known as The Grove at Sunrise.
The ARA Newmark Pacific team, led by San Francisco based Principals Mark Leary and Craig Chiappone, served as the exclusive advisors on the transaction representing both the seller, a private San Francisco Bay Area family, and the buyer, Fairfield Residential. The property sold for $27,000,000, $131,068 per unit or $137 per square foot.
Atwood is a premier residential development in the Sacramento Region, situated on the northeast corner of Madison Avenue and Sunrise Boulevard, on the border of Citrus Heights and Fair Oaks. This region attracts an educated work force with a high median household income. This suburban infill location is within walking distance to over two million square feet of retail space, it has convenient access to many recreational activities, and is in close proximity to some of the region’s largest employers. Furthermore, there is no multifamily land available for development in Citrus Heights or Fair Oaks.
Sacramento rental rates grew 9% in Q4 2014 from Q4 2013 and are poised to grow further, while the region wide vacancy declined by 1% to only 4.1%. The Citrus Heights submarket reflects these figures: vacancy decreased by 1.4% from Q4 2013 to Q4 2014 while rental rates grew 4.1% during this period.
Built in 2000, Atwood has a distinctive market advantage over comparable apartment communities because it is much newer than other properties in the area. In the Citrus Heights / Fair Oaks submarket, the average age of the multifamily product is twenty nine years old while Atwood is only fourteen years old.
Matthew Clark, Vice President of Acquisitions at Fairfield Residential commented, “ Fairfield is very bullish on the Sacramento apartment market. With the return of strong job growth and very little multifamily development in the pipeline, the market is well positioned for continued revenue growth. This is particularly true in the Citrus Heights and Fair Oaks submarkets, where no multifamily sites exist. The property offers high quality apartment homes in a location close to both employment and retail. We believe that our renovation of the common areas and amenities will greatly enhance the appeal of the property, as will the development of a new grocery anchored retail center on the old Capital Nursery site next door.”
Mark Leary of ARA Newmark added, “The property has recently seen a sharp upward trend in net rental income. Appreciable upside in operations is possible by continuing to push rents and decrease turnover time between tenants. Occupancy has also ticked up to 99%. The property provides a great opportunity for a new investor to capitalize and strengthen rental income. Additional upside can be found by expanding the existing RUBS program to 100% penetration. The previous management had only recently initiated RUBS and was achieving an approximate penetration rate of 15%.”