Dallas-based Behringer Harvard has paid $47.65 million in an all-cash deal to acquire The Renaissance apartment complex in Concord along with a neighboring land parcel.
The buyer acquired the 132-unit property at 1825 Galindo St. from Pleasanton-based Signature Homes. Signature did not respond to a request for comment. The company was represented in the sale by Apartment Realty Advisors.
“I think that this sale shows that there is still a lot of capital and interest in core real estate properties in markets that have high barriers to entry,” says John McCulloch, a partner in the San Francisco office of Apartment Realty Advisors, which represented Signature in the sale. McCulloch declined to give the capitalization rate.
Signature developed the Renaissance in 2008 as condominiums but no units were ever sold. At the time of the sale, the complex was 96 percent occupied, in line with market rates, according to Behringer Harvard.
“Investments in the San Francisco metro area are generally a good fit with the company’s multifamily platform acquisition strategy,” Jason Mattox, Behringer’s chief operating officer, said in an email message. “We concentrate on multifamily communities located in the top 50 MSAs (metropolitan statistical areas) across the United States. We believe these types of investments, particularly those in submarkets with significant barriers to entry, are in demand by institutional investors, and this can result in better exit pricing.”
Behringer Harvard generally targets apartment communities with more than 100 units that were constructed less than five years ago and are located in transit-oriented, live-work-play environments with resort-style amenities and sustainable attributes, Mattox said. “Renaissance not only fits these criteria but also offered the inducement of adjacent land that could enable us to develop additional apartment homes on the site,” he said.
The apartment complex is less than a mile from the Concord BART station. The additional land parcel is 2.7 aces and could support the development of 180 units. There is no indication as to when new development would occur.
“The community has enjoyed strong demand from young professionals working in the East Bay and those commuting to major employment centers in San Francisco and Oakland,” Mattox said. “We think Renaissance is very competitive in the affluent Concord area because it’s the newest and best-appointed rental property and its homes provide about one-third more living space than other properties in the submarket.” The units in the complex average 1,179 square feet.
The property’s major amenities are a resort-style swimming pool with a spa, a state-of-the-art fitness center and a social lounge with a fireplace and fully equipped kitchen.
The deal for Renaissance was completed for a joint venture between Behringer Harvard Multifamily REIT I and PGGM Private Real Estate Fund, an investment vehicle for Dutch pension money. Behringer Harvard creates and manages global institutional-quality real estate investment programs for individual and institutional investors. Programs sponsored and managed by the company have attracted equity of more than $5 billion.
Behringer Harvard now owns four apartment communities in the greater San Francisco Bay Area. Including the Concord buy, they are the 277-unit Acacia on Santa Rosa Creek on Quigg Drive in Santa Rosa, the 163-unit Acappella Apartments on National Avenue in San Bruno and the 179-unit Argenta at 1 Polk St. in San Francisco.
The company owns 41 apartment complexes in 13 states nationwide in markets that include Los Angeles, Las Vegas, Atlanta, Dallas and Washington, D.C.