TH Real Estate Pays $48MM to Buy Apartment Complex in Walnut Creek

TH Real Estate, Walnut Creek, Bay Area, Ivy Hill apartment complex

TH Real Estate, Walnut Creek, Bay Area, Ivy Hill apartment complex

By Jon Peterson

New York City-based TH Real Estate has acquired the 116-unit Ivy Hill apartment complex in Walnut Creek for $48.1 million, or $414,655 per unit, according to public records.

The real estate investment firm declined to comment on what it paid for the property when contacted for this story. It also would say who the seller was, however public records indicate that it was an entity associated with Newport Beach-based Hearthstone Housing Foundation. The broker on the deal representing the seller was Moran & Company out of its regional office in San Francisco.

Ivy Hill is a property that is located at 1700 Botelho Drive. The development was constructed in 2002 and features a combination of one and two bedroom units. It is also located within walking distance of the Walnut Creek BART station. “Being located so close to public transportation was a very important fact for us. This is something that a lot of renters are interested in,” says Brian Eby, a senior director with TH Real Estate. He works out of the company’s regional office in Chicago.

This property is the first acquisition that TH Real Estate has made for an apartment project in Walnut Creek. It has bought other apartment projects in the greater San Francisco Bay Area, notably The Grove apartment project in San Jose for which it paid $95.5 million in December of 2016.

The asset in Walnut Creek was acquired by TH Real Estate for its CASA series of investment apartment funds. The transaction was partially financed with a new tax-exempt bond financing upon acquisition that positions the property as an alternative to the area’s more costly rents for new construction. “As the property stands now, our in-place rents versus rents for new construction will be $600 below. Once our renovation is completed, the rent spread would be $300 below,” said Eby.

TH Real Estate sees Ivy Hill as a project that has a value-add component. This will mostly be with improvements made to the interior of the units. The property consists of 80 percent of the units being market rate and 20 percent being workforce housing. The property has very strong occupancy with it currently standing at around 95 percent. A significant number of renters in the property are young professionals. Most of the property consists of one bedroom and one bath units.

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