By Jon Peterson
Palo Alto-based Pacific Urban Residential is looking at investing $800 million worth of apartment acquisitions company wide during the 2017 calendar year. “We are expecting this level of activity next year in total for our two investment programs of vintage core apartment purchases and the buying of properties that have a value-add component,” says Al Pace, president and chief executive officer of Pacific Urban.
The real estate investor’s most recent transaction in the San Francisco Bay Area was its acquisition of the 168-unit Avenel Apartments in San Jose, which it purchased for $55.5 million, or just over $330,357 per unit, according to public records.
Pacific Urban sees this property as a very strong fit for its core vintage apartment investment program. This entity goes by the name of Pacific Multifamily Investors (PMI). “This property and its market has proven to be strong area where the sustainable of income can happen on a long-term basis. What put this asset over the top for us, was that it’s within a five-minute walk of the new BART that is projected to be open and operational in 2018,” said Pace.
The new owner of the asset is planning only to make minor improvements to the property going forward. This would include some work on both the interior and exterior of the units. “The property has been performing at a high level. This can be seen by the fact that at closing only nine of the units were vacant, which puts the occupancy at 95 percent,” said Pace.
The age of the property also fits in with the investment parameters of PMI. It requires that properties must be at least 11 years old or more. The complex in San Jose was built in 1987. The seller of the property was a partnership of TruAmerica Multifamily, Vista Investment Group and Western Investments Capital. The sellers were represented by Institutional Property Advisors, a division of Marcus & Millichap. The people involved in the sale were Stan Jones, Salvatore Saglimbeni and Philip Saglimbeni, all executive directors with IPA.
This property is in a very strong location. There is the new BART station that is coming. It also is four miles from downtown San Jose and five miles from the Golden Triangle where many of the major technology companies are located.
Pacific Urban is about to hit the $1 billion mark for gross asset value in PMI. This is a partnership between the manager and the California Public Employees Retirement System. All of the properties in the portfolio are located along the West Coast and includes properties in the San Francisco Bay Area. The portfolio totals 16 communities and just over 3,500 units. The investor is looking at buying another asset by year-end. The complex is located in the Pacific Northwest.