Brookfield Buys San Francisco’s 463-Unit Mosso Apartments for $311MM

Essex Property Trust, Mosso, San Francisco, CPP Investments, Brookfield
Image Courtesy of Mosso Apartments

By Meghan Hall

Essex Property Trust, one of the largest publicly traded investment entities on the West Coast, has disposed of a key San Francisco asset, according to public documents and its fourth-quarter earnings report. In a transaction that closed on October 19, Essex and its partner sold San Francisco’s Mosso Apartments to Brookfield Asset Management for $311 million, or about  $672,000 per unit. The company recognized a $50.2 million gain on the sale, according to the statement.

The Canada Pension Plan Investment Board, also known as CPP Investments, owned 45 percent of the 463-unit apartment complex, while Essex owned 55 percent. 

“We are pleased to report solid 2019 results, for both the fourth quarter and full-year, with same-property NOI growth at the high-end of our guidance range. Demand for rental housing remains consistently strong along the West Coast, driven by steady job growth, particularly around the tech hubs of Northern California and Seattle,” said Michael Schall, president and CEO of Essex in a statement. “A significant improvement in our cost of capital in 2019 drove transaction activity, contributing to results above the high-end of our initial 2019 guidance range for Core FFO per share, acquisitions and preferred equity investments. We expect another productive year in 2020 with stable operating fundamentals and rent growth mostly consistent with our long-term averages.” 

The apartments are located at 900 Folsom Street in San Francisco’s coveted South of Market neighborhood. The development is composed of a mix of traditional apartments, live/work spaces and townhomes. Apartment sizes include studios up to three-bedrooms, with the largest units spanning 1,900 square feet. Prices for units, according to Mosso’s website, start at around $3,200 per month and can reach more than $5,200 per month.

Apartments come with wide plank hardwood-style flooring, washer/dryers, balconies, polished quartz countertops and stainless steel appliances. Community amenities are also extensive; residents have access to a fitness center, rooftop terrace, business center, lounge, clubroom and solarium. Pets are also welcome, with Mosso also featuring a designated dog-washing area.

Both Brookfield and Essex Property Trust are extremely active in the Bay Area. Around the same time that Essex disposed of its stake in Mosso, the San Mateo-based trust acquired three complexes in Emeryville, Menlo Park and Redwood City for $414.7 million. The acquisitions included the $178 million purchase of The Courtyards at 65th Street, the $148 million purchase of the Hamilton Apartments and the $88.7 million acquisition of the Township Apartments.

In January of this year, Essex also acquired CCP Investments’ 45 percent interest in a land parcel and six communities representing more 2,020 apartment homes for about $1 billion, according to the statement. A list of which properties belonged to this partnership was not available at this time. 

Brookfield has been active in the Bay Area real estate multifamily market, and it made another big buy during the fourth quarter of 2019, acquiring The Village Residences, a 330-unit luxury multifamily complex in Mountain View for $292 million, or about $885,000 per unit. 

West Coast Commercial Real Estate News