Invesco Spends $21.3MM in Equity Deal for Santa Clara Project with SummerHill

Bay Area, Santa Clara, Invesco, SummerHill Apartment Communities, Tasman Specific Plan Area The Lafayette

By Vladimir Bosanac

One part of the commercial real estate industry that has fared well over the last couple of years has been the multifamily sector. The supply-constrained market across the Bay Area likely means the multifamily market in the region will continue to fare well for investors and developers. A recently closed partnership between Atlanta-based Invesco and Palo Alto-based SummerHill Apartment Communities shows that interest continues to be strong in the region’s multifamily market from institutional investors across the country.

Invesco’s deal with SummerHill is for a property located at 2323 Calle Del Mundo in Santa Clara. SummerHill is looking to construct a residential development at the site called The Lafayette, which will have 347 units located on a 3.05-acre parcel. The building will be seven stories high, and delivery is expected in the late 2024 – early 2025 timeframe, according to a company representative.

Invesco contributed $21,327,500 for its equity of the development, according to public documents. The deal closed in early August of 2022. According to industry reports, the partnership has already secured a $115.8 million construction loan, which was underwritten by Chicago-based BMO Harris Bank.

“SummerHill Apartment Communities is looking forward to being one of the first new buildings in the Tasman Specific Plan Area neighborhood. We will be providing much-needed new housing to the City of Santa Clara in the heart of Silicon Valley. The new community will also provide 34 affordable new apartments,” said Doug McDonald, president of SummerHill Apartment Communities in a statement to The Registry.

The development team will demolish three existing light industrial buildings on the site, which is located within the Tasman East Specific Plan. In addition to the apartment building, the project also includes a nearly half-acre City of Santa Clara park, which will include a dog park and children’s play area, according to the development plans. The proposed park also includes walking and bicycling paths, which will connect into the broader Tasman East bicycle and pedestrian network. The proposed apartment building will include two stories of above-ground parking, seven stories of residential units with associated building amenities and a community garden, the project’s website states. SummerHill proposes a total of 275,000 square feet of new residential area with 396 vehicular parking spaces and 24 bicycle parking spaces.

The development of this project is coming in a time when the residential market across the greater Bay Area continues to be deeply supply-constrained. According to a recent, July of 2022 Yardi Matrix Multifamily Report for Silicon Valley, multifamily assets showed strong fundamentals approaching midyear 2022. This is partially driven by the lack of new housing provided in the market, but also by high occupancy rates over 95 percent and unemployment in the region that is at the lowest level in a decade at 2.2 percent, outpacing both the national and state averages.

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