Essex Property Trust, which last week announced it was moving its corporate headquarters from Palo Alto to San Mateo, also did a bit of inventory evaluation at the same time. The publicly traded REIT announced last week the sale of Sharon Green Apartments located in Menlo Park for $245 million, or $828,000 per door. The property, which was part of the BRE Properties purchase that closed in April of 2014, was completed in 1970 and has 296 one, two and three bedroom apartments. Some of the units were also offered as executive, extended stay apartments.
According to a report from the Silicon Valley Business Journal, the buyer of Sharon Green is an affiliate entity of Deutsche Asset & Wealth Management and Maximus Real Estate Partners. Institutional Property Advisors acted as the broker on the transaction. Stan Jones, Phil Saglimbeni and Sal Saglimbeni led the deal.
The sale price per unit is a new record figure for the Peninsula market, and Maximus seem to be comfortable setting this trend around the region. In July of this year, a partnership between Maximus and Rockpoint Group purchased the 298-unit luxury residential tower at 401 Harrison Street in San Francisco. The public documents, which were first obtained by The Registry, confirmed the purchase price of $410 million, or roughly $1.375 million per unit. In that transaction, the rental building was looking to convert the units into condos, and the firms had already applied for that transition. No information was available on the strategy behind Sharon Green by the time this went to press.
Sharon Green Apartments is a community surrounded by nature and is just minutes from the upscale shops and restaurants at Stanford Shopping Center. Some units feature wood-burning fire places, large patios and balconies, as well as other modern amenities like a club house, a business center and a fitness center.
According to a fourth quarter Apartment Research Market Report by Marcus & Millichap, all submarkets in San Mateo County recorded measured moves higher over the last 12 months, with North San Mateo County up 15.2 percent to $2,498 per month. Central and South San Mateo County elevated 10.1 percent to $2,892 per month and 13.6 percent to 2,731 per month, respectively. Even with ascending completions, average effective rents will swell 8.5 percent to $3,039 per month this year, far outpacing inflation expectations over the same period, stated the report.
Essex is wasting no time in deploying that capital elsewhere. According to a statement the company provided to The Registry, the firm plans to deploy $166 million to acquire two properties at $441,000 per unit in Los Angeles and San Jose. These transactions will add 376 units to the firm’s portfolio and are expected to close by the end of the year.