Greensboro, N.C.-based Bell Partners, which in June of 2017 opened a regional office in San Francisco to pursue investment opportunities in both Northern and Southern California, and ultimately in the Pacific Northwest, acquired its first asset in the Bay Area. The company paid $44.6 million, or $557,500 per unit, to acquire the 80-unit Maxwell apartments in Oakland. The complex, located at 1801 Jefferson St., will be renamed to Bell Uptown District.
The entity through which Bell purchased the asset is Bell Apartment Fund VI, for which company made a $600 million equity raise. One of the investors in this commingled fund was a $75 million commitment from the Pennsylvania Public School Employees Retirement System.
To date, the fund has made three acquisitions in 2018 in California. Two of them were in Southern California, where Bell acquired a property in Los Angeles, Bell South Bay, for $123 million, and one in Pasadena, Bell Pasadena, for $97.3 million. The Oakland purchase is its third in the portfolio.
“We are pleased to announce our third acquisition this year in California. Bell Uptown District is the Company’s first investment in Northern California, and it underscores our commitment to expanding our presence on the West Coast. We believe in the long term growth potential of the Bay Area and the rapidly transforming Oakland market,” said Nickolay Bochilo, senior vice president of investments at Bell Partners and the head of the office in San Francisco in a statement. “The property is located in a highly walkable location with close proximity to BART, employment and popular local restaurants. We expect the area to continue to improve in its desirability, which should support property value appreciation over time.”
The strategy for the Oakland property follows one of three investment criteria the company has. One is focused on a physical renovation of the property. Another focuses on improving the overall operations of the property, and the third focused on investing capital into properties located in emerging neighborhoods, as well as properties that have pricing dislocations.
Most of the acquisitions for Fund VI will be properties that range in size from 150 to 450 units. Properties will be acquired with a combination of cash and up to 65 percent debt. This will give the fund a total capitalization of around $1.7 billion.
Bell Partners also has a capital source that invests in core apartment complexes across the country. The manager has a $1 billion separate account with a German real estate special fund managed by HANSAINVEST. The venture is focused on buying core stabilized assets in major markets.