Sacramento Multi-Family Property Sells For $46MM

Cushman & Wakefield, FPA Multifamily, Sacramento, Demmon Partners, Downtown Sacramento, California State University Sacramento, The Falls at Arden, C&W Services

Cushman & Wakefield Advises on “The Falls at Arden” Sale, Located in the Heart of One of the Top Rent Growth Markets in the Nation

San Francisco, Ca., February 6, 2018 – Cushman & Wakefield has acted as exclusive advisor to FPA Multifamily, for the sale of ‘The Falls at Arden’ a 272-unit apartment community located on 9.991 acres at 2345 Northrop Avenue, Sacramento. Senior Director, Jason Parr led the team that advised on the sale. The buyer was Demmon Partners.

The Property was built in 1986. It offers a favorable mix of 72 studio units, 144 one-bedroom units, and 56 two-bedroom units – currently at approximately 95% occupancy.

Situated six miles east of Downtown Sacramento and two miles from California State University Sacramento, the Property provides residents convenient access to the region’s major employment centers. Upscale retail, dining, grocery, and entertainment options are also in the immediate vicinity.

Mr. Parr said over $3.6 million worth of interior and exterior improvements had been made to the Property since March 2016. Rent premiums – as much as $190 per unit – have been achieved through the addition of washers and dryers to 70% of the one and two bedroom units.

“The improvements have resulted in effective rent growth of more than 11% over the past 12 months making this an attractive investment proposition to the buyer. Further, the Property provides the ideal combination of a stable cash flow stream with the opportunity to significantly increase net operating income through a proven interior renovation strategy,” Mr. Parr said.

The Falls at Arden is located in a mature and high barrier to entry submarket. The majority of commercial and residential real estate in this submarket was constructed pre-1990, leaving effectively no land for large-scale, high density multi-family development.

The political environment is challenging to navigate, and entitlement and construction costs continue to rise. These factors combined make it extraordinarily difficult to build new in-fill residential projects within this submarket. Currently there are no new market rate multifamily projects planned or under construction in the submarket.

“The Falls at Arden is well positioned to further benefit as rent growth in Sacramento continues to rank #1 in the nation, and has done for the past 20 months,” Mr. Parr added.

Sacramento’s urban core is going through an unprecedented transformation and is one of the fastest growing areas in the country. As of December 2017, Sacramento’s annual rent growth was an extraordinary 6.2%, while the national average was 2.2%. Rents have risen every quarter for the past five + years driving Sacramento’s rental market well past its pre-recessionary levels.

About Cushman & Wakefield
Cushman & Wakefield is a leading global real estate services firm with 45,000 employees in more than 70 countries helping occupiers and investors optimize the value of their real estate. Cushman & Wakefield is among the largest commercial real estate services firms with revenue of $6 billion across core services of agency leasing, asset services, capital markets, facility services (C&W Services), global occupier services, investment & asset management (DTZ Investors), project & development services, tenant representation, and valuation & advisory. To learn more, visit www.cushmanwakefield.com or follow @CushWake on Twitter.

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