Hamilton Zanze, Graham Street Realty & Davidson Kempner Acquire 60-Property Portfolio In Northern California for $436.5MM

Hamilton Zanze, Graham Street Realty, Davidson Kemper, Marin, Sonoma, Mission Rock Residential, Paramount Company
Courtesy of Matthias Mullie

SAN FRANCISCO — Hamilton Zanze (HZ) & Graham Street Realty (GSR), two affiliated Bay-Area-based national real estate investment firms and Davidson Kempner Capital Management (Davidson Kempner), a New York-based investment management firm, have closed on the acquisition of a 60-property portfolio spread across Marin and Sonoma counties in California. The properties comprise more than 1.4 million square feet of commercial and multifamily space and were acquired for a total purchase price of $436.5 million.

The diverse portfolio’s acquisition closed on December 15th. It was transacted through the Federal Bankruptcy Court, where the properties have been held since late 2020. The group was named the winning bidder after the court’s open bidding process was held in September. 

Due to the firms’ expertise in the ownership and successful management of both multifamily (HZ) and commercial real estate (GSR), the group was uniquely positioned to absorb the large, multi-faceted portfolio amongst competing bidders. The properties range in size from 3,500 square feet up to 85,000 square feet, encompassing a total of 935 residential units and approximately 680,000 square feet of commercial space. 

“We are enthusiastic about the opportunity to bring these properties into our portfolios and deliver successful investment results for our investing partners,” said David Messing, Managing Principal of Graham Street Realty. Ashlee Cabeal, Chief Financial Officer of Hamilton Zanze added, “We look forward to investing over $50 million of capital into these properties, which are located in our own communities.” Many HZ employees and executives live in Marin County, and most of the multifamily assets represent critical workforce housing, which will receive over half of the projected capital investment to provide safe and appealing housing to households of all income levels.

The operation of the 60 properties will be split between affiliated property management firms Mission Rock Residential, overseeing the multifamily assets, and Paramount Property Company, managing the commercial office buildings. The properties were previously owned by Professional Financial Investors.

The Hamilton Zanze team’s personal and professional roots have been based in the Northern California real estate community, with principals Mark Hamilton, Tony Zanze and Kurt Houtkooper all beginning their real estate careers in the region more than 30 years ago. Throughout the firm’s growth and expansion across the country, the Bay Area has remained the organization’s headquarters since it was established in 2001. 

“Closing out Hamilton Zanze’s 20th year in operation with this exciting acquisition right here in our hometown has been momentous for us,” said Kurt Houtkooper, the company’s Chief Investment Officer and President. “We started here and have grown here, and we are looking forward to the immediate growth opportunity the addition of this portfolio will bring to our teams’ collective work in the Western region.” 

In a time where many organizations have reengaged with their local marketplaces as a result of the COVID-19 pandemic, HZ and GSR anticipate this portfolio acquisition will provide a strengthening of their local presence in the Bay Area. GSR already owned 5 commercial office properties in the Bay Area before the closing of this transaction, and further HZ investment is strategically planned in the region in the years to come as well.

A complete list of property addresses is available upon request. 

ABOUT HAMILTON ZANZE REAL ESTATE INVESTMENTS
Hamilton Zanze (HZ) is a private, San Francisco-based real estate investment company that owns and operates apartment communities. Since its founding in 2001, Hamilton Zanze has acquired over $5.3 billion in multifamily assets primarily in the Western, Southwestern, and Eastern U.S. The company currently owns and operates more than 150 properties across 16 states and 29 market areas.

ABOUT GRAHAM STREET REALTY
Graham Street Realty (GSR) is a San Francisco-based commercial real estate investment firm founded in 2007. Since that time, GSR has purchased over $275 million in assets. As of Q3 2020, GSR currently owns and operates 14 properties in three states. Since its founding, the firm’s focus has been on value-add investment in the multi-tenant building market.

ABOUT DAVIDSON KEMPNER CAPITAL MANAGEMENT 
Davidson Kempner Capital Management (Davidson Kempner) is a U.S.-registered global institutional investment management firm with more than 38 years of experience and a focus on fundamental investing with a multi-strategy approach. Davidson Kempner has more than $38 billion in assets under management with over 400 professionals in six offices, including New York, Philadelphia, London, Dublin, Hong Kong and Shenzhen.

ABOUT MISSION ROCK RESIDENTIAL
Mission Rock Residential was established in 2012. The company now manages 123 multi-family properties and approximately 29,000 residential units across the United States. With a team of more than 700 full time Team Members, the company is headquartered in Denver, Colorado with regional offices in Phoenix and Atlanta. The company was also named one of the Best Places to Work by the National Apartment Association in 2021.

ABOUT PARAMOUNT PROPERTY COMPANY
Paramount Property Company (PPC) is an independent commercial property management company locally based and operated in the San Francisco Bay Area. Their mission is focused on maximizing return on investment for commercial real estate owners while delivering the highest quality of care and service to property tenants and their team members.

West Coast Commercial Real Estate News