Fully-Affordable Apartment Asset in Berkeley Sells for $72.1MM

Berkeley, CA – Greysteel, a national commercial real estate investment services firm, has brokered the sale of and secured the acquisition financing for Redwood Gardens Apartments, a 169- unit HUD-subsidized, senior-designated property in Berkeley, CA benefiting from a Section 8 Housing Assistance Payment (HAP) contract.

Managing Director, John Mullen; Senior Director, Henry Mathies; and President and CEO Ari Firoozabadi of Greysteel’s National Affordable Housing Group exclusively represented the Seller, a national non- profit affordable housing developer. Greysteel also procured the Buyer, a partnership between Foundation Housing, one of the largest non-profit, affordable housing owners in the U.S. with more than 13,000 units, and Pennant Housing Group, a national developer of affordable housing with extensive experience redeveloping affordable communities in California and across the country. In addition, Greysteel assisted the Buyer in securing the acquisition financing. The Property sold for $72.1M.

“This transaction was heavily nuanced and required constant, transparent communication between all parties to navigate the challenges of the COVID-19 pandemic and obtain approvals from the City of Berkeley, University of California Berkeley, and HUD. The professionalism and efficiency exhibited by the Seller and Buyer were exemplary,” said John Mullen of Greysteel.

The site on which Redwood Gardens was developed has historical significance. It features a historic structure built for the California School for the Deaf and Blind in 1922. In 1984, additional living space was developed at Redwood Gardens in three-story-high buildings adjacent to that historic structure on the community’s 3.5-acre property in the Claremont District of the city. Redwood Gardens serves elderly residents, age 62 and older, as well as mobility-impaired, low income residents. This community will continue to operate as such in perpetuity per regulatory agreements.

“Foundation Housing is excited to partner yet again with Pennant Housing Group in Berkeley to ensure the expansion of affordable living opportunities during these challenging times,” said Todd Travis, President and Chief Operating Officer of Foundation Housing. “The purchase of Redwood Gardens aligns with our goal of expanding our portfolio in California, where the housing crunch has made the preservation of affordable living opportunities especially important to the health of our country.”

The joint venture of Foundation Housing and Pennant Housing previously teamed up in Berkeley in 2018 to purchase Harriet Tubman Terrace Apartments. The 91-unit mid-rise was built in 1976. Occupancy at Tubman is restricted to households age 62 and over or the disabled age 18 and over.

“At Pennant, we demonstrate how strong collaboration plus strategic capital can translate into the growth of affordable communities,” stated Pennant Housing Group Principal Andrew Agetstein. “We take tremendous pride in this opportunity to bring together dynamic partners to ensure Redwood Gardens remains an affordable housing community.”

About Greysteel:

Greysteel is a commercial real estate and capital markets services firm with 14 offices located in
New York, NY; Los Angeles, CA; Dallas, TX; Fort Worth, TX; Washington, D.C.; Philadelphia, PA;
Phoenix, AZ; Denver, CO; Baltimore, MD and Norfolk, VA. Greysteel serves and advises private and institutional real estate investors and developers in the marketing, sale, and financing of private capital and middle-market real estate assets. www.greysteel.com

About Foundation Housing:

Foundation Housing is a 501(c)(3) nonprofit headquartered in North Bethesda, Maryland that is committed to creating solutions to address the affordable housing crisis nationwide. Since its formation in 1990, Foundation Housing has been integrally involved in the recapitalization and preservation of more than 55,000 units of multifamily housing with transaction values exceeding $4.5 billion. Foundation Housing has a nationwide portfolio with properties in 21 states and The District of Columbia. Our creative approach to the acquisition and development of affordable housing has made a marked difference in preserving America’s rental housing stock and assisting underserved, low-income populations to obtain better access to decent, safe, and well-managed living opportunities. 

About Pennant Housing Group:

Pennant Housing Group (“PHG”) is an owner, operator and developer of affordable housing communities, specializing in the use of sophisticated financing strategies such as the low-income housing tax credit (“LIHTC”) and tax-exempt bond financing. Headquartered in Washington, D.C., PHG was formed with the objective of improving communities nationwide by preserving multifamily housing for low-income families. PHG also advises for-profit and non profit clients on a range of preservation and redevelopment strategies.

West Coast Commercial Real Estate News