By Jon Peterson
There is a chance that one apartment complex in the San Francisco Bay Area could be part of a joint venture that Palo Alto-based Essex Properties Trust has formed with institutional capital of part of its $16.2 billion merger with San Francisco-based BRE Properties.[contextly_sidebar id=”cd2442c51a218531e982f2b8e770620f”]The property that could be part of the venture is the 282-unit Verandas Apartment Homes complex in Union City located at 33 Union Square.
Essex has not publicly disclosed the names of the properties or capital sources that will be part of the institutional venture. “We will not be releasing his information until our first quarter 2014 report comes out. This will happen on May 7th or 8th,” says Barb Pak, director of Investor Relations for Essex.
BRE properties did indicate that the property in Union City might be part of the joint venture. This is according to a 425 Document filed with Securities & Exchange Commission on January 15th. In this document was a letter written by Scott Reinert, executive vice president of operations for BRE. He stated that there were a total of 20 properties that were being considered to be included in a joint venture established by Essex on or after the closing of the merger.
Besides the property in Union City, the other assets are located in Seattle and Southern California. This would include places like Seattle, Bothell, Los Angeles and San Diego.
There will be a total of 17 properties in the joint venture, so all of the assets will not be included in it going forward. There are a total of two separate third-party institutional joint venture partners in this relationship. The aggregate value of the ventures is $888 million.
Essex and its subsidiaries will own a 50 percent interest in each of the joint ventures and the institutional partners will hold the rest. The publicly traded REIT will be the manager partner of each JV.