By Jon Peterson
Palo Alto-based Pacific Urban Residential has acquired the 138-unit Skyline Terrace Apartments in Burlingame for $108 million, or around $782,608 per unit, according to multiple sources aware of the transaction. The property is located at 3133 Frontera Way.
Pacific Urban declined to comment when contacted via email for this story.
The seller of the property was Chicago-based Equity Residential. The listing agent on the sale was Institutional Property Advisors, which operates out of the company’s Palo Alto office. Working on the sale was Stan Jones, Phil Saglimbeni, Sal Saglimbeni and Alex Tartaglia. IPA also declined to comment when contacted on this transaction.
The sale on the property produced a 4.5 percent disposition yield, according to sources familiar with the sale. This return is based on the property’s current net operating income. The price point on this sale was locked in by the new owner prior to the outbreak of the coronavirus and all of the market uncertainty that has been created.
Equity Residential has been the owner of the property for around 9.5 years. The publicly traded real estate investment trust had acquired the property for $52.5 million in October 2010, according to public records.
Skyline Terrace was developed in 1967. The age of this property puts it in line with the investment strategy that Pacific Urban has for its partnership with the California Public Employees Retirement System that operates under the name of Pacific Multifamily Investors. This entity looks to buy apartments that are at least 11 years old that have the capability to sustain income over the life of the ownership of the property.
CalPERS has placed a value on the PMI partnership at $1.39 billion as of the end of June 2019, according to the pension fund’s annual report. The vast majority of the assets in the partnership are located on the West Coast. The pension fund did issue a new allocation of $400 million to the partnership last fall, as stated by CalPERS in a board meeting document.