Riaz Capital has purchased a 200-unit multifamily portfolio in Oakland, California from a private seller for approximately $44 million dollars. According to sources familiar with the transaction, Colliers represented the private seller and procured the buyer in the transaction. The buyer in the portfolio transaction was Riaz Capital, a large multifamily focused developer and operator with deep ties to the Oakland market.
The portfolio consisted of two assets both built in the early 1960’s and located approximately ten blocks from Lake Merritt and about a five minute drive of downtown Oakland. The portfolio consisted of Oakbrook Manor and Palmcrest Apartments, both located within one block of each other in the Clinton district of Oakland.
Palmcrest Apartments is a 56-unit community offering a mix of studio, one-bedroom and two-bedroom residences that are efficient and affordable. Built in 1962, Palmcrest is comprised of a 12-unit building and another 44-unit building surrounded by courtyard with a deck area surrounded by palm trees.
Oakbrook Manor sits on a full city block, and offers 144 units in four identical 36-unit buildings surrounding a large central secured-access parking terrace. The property features large units, solar-powered thermal water heating system, ample parking garages on the exterior and a large community room that will make an ideal conversion to a central leasing office and fitness facility.
The Colliers team on the assignment was lead by Brandon Geraldo, Ryan Wagner and Matt Kroger, all Executive Vice Presidents in the Colliers San Francisco office. Along with team members Kalah Espinoza, Matt Flaherty and Adam Carosso, the Colliers multifamily team in San Francisco has completed over $240,000,000 in multifamily dispositions during the last 12 months, making them one of the most active brokerage teams in Northern California. This 200-unit portfolio was the second tranche of a 325-unit portfolio, with the entire disposition process executed amidst the Covid pandemic.
According to Wagner and Geraldo, there was significant interest from a variety of investment groups, ranging from private capital to institutional capital to affordable groups. “One of the main benefits of owning rent-controlled housing is that there is usually significant upside in the rents, which protects your downside”, said Wagner. In recent conversations, they shared that while investor demand is mixed, with very little short-term clarity, long-term investors are still actively engaged and looking to deploy additional capital into one of the safest asset classes during any market cycle – stabilized multifamily investments.
Noted in the marketing materials shared by Colliers, the rents in certain class-B properties in Oakland have only dropped by about 5-7% as a result of Covid, as opposed to class-A rents where the rent softening has been much more profound. This rental rate resilience further demonstrates that renters are often renting out of necessity and proximity to employment, as opposed to luxury rentals with residents who can now have the option of living and working in a more remote setting. Sometimes it’s nice to NOT own the nicest product in a given market.
About Colliers International Group Inc.
Colliers International Group Inc. (NASDAQ: CIGI) (TSX: CIGI) is a top tier global real estate services and investment management company operating in 69 countries with a workforce of more than 13,000 professionals. Colliers is the fastest-growing publicly listed global real estate services and investment management company, with 2020 corporate revenues of $2.3 billion ($2.7 billion including affiliates). With an enterprising culture and significant employee ownership and control, Colliers professionals provide a full range of services to real estate occupiers, owners and investors worldwide, and through its investment management services platform, has more than $25 billion of assets under management from the world’s most respected institutional real estate investors.
Colliers professionals think differently, share great ideas and offer thoughtful and innovative advice to accelerate the success of its clients. Colliers has been ranked among the top 100 global outsourcing firms by the International Association of Outsourcing Professionals for 13 consecutive years, more than any other real estate services firm. Colliers is ranked the number one property manager in the world by Commercial Property Executive for two years in a row.
About Riaz Capital
Riaz Capital is an Oakland, California based fully integrated development, construction and property management company, focused on addressing the changing housing needs of the millennial generation. Their mission is that anyone who earns area median income can afford a place they would love to call home by building transit-oriented high-quality apartments at an affordable price point for residents.
Theis vertically integrated development firm has operated in the Bay Area since 1977, which has led to the development of market knowledge, civic relationships, and a clear understanding of how to build high quality housing efficiently. Today, the Riaz Capital team manages over 1,300 units and has roughly 1,500 residences in development or construction, and possesses core competencies in development, construction, property management, finance & capital markets to exercise control and speed of execution through every stage of the development cycle.