By Meghan Hall
Suisun City sits at the heart of Solano County, just an hour’s drive to San Francisco and the East San Francisco Bay Area. However, despite its location, Suisun City — and Solano County at large — has a fairly limited multifamily development pipeline, with value-add opportunities playing an important role in this suburban submarket. In one such transaction, FPA Multifamily purchased the 294-unit Village Green Apartment Complex in Suisun City for $51.7 million, or about $175,850 per unit. The seller was JCM Partners, who had owned and maintained the property for the past 32 years.
Jason Parr, Managing Director at Cushman and Wakefield and head of the company’s Northern California multifamily team, represented both the buyer and seller in the off-market transaction. According to Parr, the opportunity to purchase the property was offered exclusively to FPA Multifamily, who had owned property in the area previously.
The property has been extremely well-maintained, stated Parr, and is in its original, classic condition. About $2.18 million improvements have been made to the property since 2014, with the largest projects including updated washer and dryer units, automatic gate installation and new landscaping. FPA Multifamily hopes to reposition the property, but the timeline or budget for renovations is not yet clear. Parr estimates that once renovations are complete, the units could see a plus side of about $300 per month.
“If you’re talking about some of the highlights of investment, you basically have someone who has owned the property long term and maintained it very well. 91 percent of the units are unrenovated, so that provides a path to a substantial upside for a new owner.”
This type of property — one that remains mostly unrenovated — is rare, according to Parr. Most owners will often undertake minor capital improvement projects before selling, creating a mix of renovations that occur over several different spans of time. The Village Green is unique because it provides a blank slate for renovations and an opportunity for an investor such as FPA Multifamily to maximize its investment.
“I would say this is a rare opportunity to find a property that has been maintained by one owner for such a long time and maintained so diligently, but also one that provides nearly 100 percent renovation opportunity,” explained Parr. “Many of the properties that you see have been picked over by owner after owner; they’re kind of a hodge-podge of renovations by different owners. But to have a very clean, 32-year ownership, is a rare opportunity. It is highly desirable for any value-add, multifamily buyer.”
Although the transaction was completed off-market, Parr believes that the property would have generated a lot of interest from investors, especially in a market where new multifamily development is limited and value-add opportunities are more common.
“For market rate, there’s basically no apartment development pipeline for Solano County, and [this property] is well below replacement cost,” stated Parr. “The political difficult in getting projects approved in combination with the cost of construction has limited development.”
According to a first quarter Bay Area Multifamily report released by Cushman and Wakefield, there are just 520 units under construction between Napa and Solano Counties, although the report does not distinguish where the bulk of those deliveries will lie. However, fundamentals are expected to remain strong. According to Yardi Matrix, rent projections for the Solano County submarket are at about 44 percent by 2028.
Since its founding, FPA’s transaction history includes around 530 buildings and more than 107,000 units, totaling more than $11.9 billion, according to its website. The firm targets core-plus and value-add opportunities across the United States and along the West Coast in major cities such as Portland, San Diego and Los Angeles.