By Jon Peterson
San Mateo-based Essex Properties Trust has paid $164.9 million, or just under $550,000 per unit, to acquire the 300-unit Brio apartment complex in Walnut Creek, according to the real estate investment trust’s 2019 second quarter earnings report. The investor used a DownREIT structure in the purchase of the property.
At the same time that the deal closed, the public REIT assumed a $98.7 million mortgage loan on the property with an effective interest rate of 3.2 percent. The debt on the asset has a maturity rate date in 2025.
The last time this property was sold was in June of 2015, when the price paid for the complex was $44.2 million, according to public records. The entity that purchased it at that time was affiliated with Pacific Urban Residential, a Palo Alto-based multifamily investment company. This complex, which is located at 161 N Civic Dr., was first developed in 2014 by SummerHill Apartment Communities, a division of SummerHill Housing Group.
This sale of this property is another good example of institutional capital looking to own large apartment complexes near public transit. Brio is located four blocks from the BART Walnut Creek Station. The average rents in the property are projected to be $3,307 per month.
Essex does not have a great deal of exposure to apartment complexes located in Walnut Creek. Its only other asset that it currently owns in the city is the 49-unit Agora complex located at 1500 Newell Avenue, according to the REIT’s second quarter 2019 apartment communities list. This asset was acquired by the REIT in 2016.
Essex has also made two preferred equity investments on assets in Oakland during the second quarter, according to the company’s second quarter earners report. The first is a $36.8 million investment with an initial preferred return of 10.3 percent. The other investment was a $11.8 million move that has an initial preferred return of 11 percent. Both transactions will be funded through third and fourth quarter of this year. No other details on the properties were given at this time.