MJM Land Development Buys Sunnyvale Apartment Complex for $24MM

MJM Development, Sunnyvale, Bungalows at Ahwanee, Google, Facebook, Kidder Mathews, Amazon, Marcus & Millichap
Courtesy of Marcus & Millichap

By Meghan Hall

A Sunnyvale apartment complex has traded hands, indicating that investor appetite for well-located assets continues. In a deal that closed last week, an entity affiliated with MJM Land Development purchased the Bungalows at Ahwanee Apartments for $24 million. The property was sold by an entity affiliated with Ahwanee Bungalows LLC.

The Mercury News was the first to report the transaction.

The Bungalows at Ahwanee community is located at 126 W. Ahwanee Ave. in the heart of Sunnyvale. The property was originally listed for $25.5 million, or $375,000 per unit, according to listing documents obtained by The Registry. The complex includes 68 residences and totals 37,400 square feet. The property is 97 percent occupied.

According to public documents, the property was last sold by Michael Ruder and Barbara Lackay Ruder in November of 2017 for $26 million.

The property’s location places it within close proximity of major employers, including Amazon, Google and Facebook. The Bungalows at Ahwanee are also accessible via State Routes 101 and 237, and is within a few minutes’ drive of several major attractions such as Baylands Park and California’s Great America.

At the end of the fourth quarter of 2020, multifamily fundamentals were in flux as vacancies, unemployment and deliveries were up, and rental rates were down. Across the Bay Area, multifamily vacancy sat at 8.2 percent—compared with 5.1 percent in 2018, while average asking rents dipped more than six percent to about $2,235 per unit. The average sales price per  unit also decreased after peaking in  2019. At the market’s strongest, the average unit sold for $419,627; in 2020, units sold for about $353,633, a decrease of more than 15 percent.

A report released by Kidder Mathews at the end of the year indicates these trends could continue. Last year, 13,671 apartment units were delivered, while absorption came in at just over 10,000. Nevertheless, investors are showing their interest in apartment assets in Sunnyvale and beyond. In October of 2020, SummerHill Homes closed on a $58 million deal for The Landmark, a 130-unit complex with redevelopment plans in the pipeline. In December, a fully-affordable apartment asset in Berkeley traded for $72.1 million, and a luxury community in Sacramento sold for $92.3 million, inching the market forward.

West Coast Commercial Real Estate News