Joint-venture partner Holualoa Companies partners with Trion on San Leandro multifamily asset
San Francisco, California (February 8, 2016) – Trion Properties, a Los Angeles-based boutique private equity firm that specializes in opportunistic real estate investments along the west coast, has acquired two value-add multifamily assets in the East Bay, the most highly populated region of San Francisco’s Bay Area.
The two acquisitions, a 30-unit apartment community in Hayward, California and a 38-unit complex in San Leandro, California, add $13.58 million to Trion Properties’ portfolio of $100 million in assets under management.
“Sourcing two value-add properties in these prime East Bay locations demonstrates our ability to add outstanding opportunistic assets to our existing investment portfolio,” explains Farhan Mahmood, Director of Acquisitions at Trion Properties. “Situated within close proximity to the Silicon Valley, San Francisco, and Oakland job markets, these apartment communities provide easy access to thousands of jobs for renters who are being pushed out of the central Bay Area due to high rents.”
According to Mahmood, the Hayward and San Leandro properties charge rents that are roughly 35 percent less than asking rates in the more expensive surrounding submarkets. Trion Properties therefore anticipates high tenant demand which, combined with its aggressive lease-up and renovation strategy, will drive strong cash flow, as well as rates of return in excess of 30 percent.
Debt for both transactions was arranged by Los Angeles-based Continental Funding Group, with a 70 percent loan-to-cost floating rate loan that has an interest rate of 3.5 percent over LIBOR.
Trion Properties has acquired a 30-unit apartment community located at 23924 2nd Street in Hayward, California for $6.65 million.
Located in the East Bay area, the property offers convenient access to two BART stations, an Amtrak station, and the San Francisco International Airport, providing tenants with a variety of options for commuting to work or traveling.
Known as the “Heart of the Bay” because of the city’s central location in Alameda County, Hayward is nestled between rapidly expanding job markets such as San Francisco and San Jose and is poised for economic growth. Downtown Hayward has recently undergone a huge rejuvenation with a $105 million, 6-mile renovation called the Hayward Loop, which has reduced commute times by 30 percent and has refurbished the city’s downtown by adding trees, street art and upgrading storefronts.
“In addition to its ideal location, the Hayward apartment presents a tremendous opportunity to improve its facilities through extensive renovations, thereby creating value for current and prospective tenants seeking high quality living arrangements in the East Bay area,” notes Mahmood.
Trion Properties plans to invest approximately $713,000 in renovations which include installing vinyl wood plank flooring, quartz kitchen countertops, stainless steel appliances, modern cabinets, new light fixtures, and smart locks to revitalize the interior of each unit, according to Mahmood.
Tom Hyman at Highland Investment Properties, Inc. brokered the transaction.
San Leandro Apartments
Trion Properties and joint-venture partner Holualoa Companies have acquired a 38-unit apartment complex located at 348 Estabrook Street in San Leandro, California for $7.2 million.
The San Leandro apartment offers immediate access to BART stations, the Oakland International Airport, and the San Leandro Technology Campus, a 500,000 square-foot campus of connected office space adjacent to the BART station. The San Leandro Technology Campus, known as the “future of business and industry,” will bring an estimated 1,800 high quality jobs to San Leandro, thereby driving exponential economic growth in the next few years.
Trion and Holualoa plan to invest approximately $1 million in renovations into the property, which include installing vinyl wood plank flooring, quartz kitchen countertops, stainless steel appliances, modern cabinets, new light fixtures, and smart locks.
“The acquisition of this apartment complex strongly aligns with our strategy of investing in underperforming multifamily properties, then repositioning them through high-end renovations to increase our net operating income and maximize investor returns,” Mahmood adds. “With our in-house property management team and fully built-out operator platform, we will perform upgrades to the common areas and improve the property’s amenities to stabilize the asset, creating an institutional quality product with a boutique feel.”
Eduardo Vergara at Marcus & Millichap represented Trion in the transaction.
About Trion Properties
Founded in 2005 and headquartered in Los Angeles, Trion Properties is a private equity investment firm that primarily acquires opportunistic real estate properties with an emphasis on multifamily. Trion’s value-add portfolio spans the west coast and encompasses $100 million in assets under management which have generated an average internal rate of return in excess of 30 percent. With its fully built-out operator platform, Trion has repositioned and stabilized undervalued assets, leveraging its expertise in real estate finance and renovation of multifamily properties to drive returns for its investors. Since its inception, Trion has acquired the fee interest—or in certain instances the debt secured by the fee interest—of over 1,500 multifamily units. To date, Trion has successfully repositioned and resold over 795 units totaling over 50,000 square feet of commercial real estate space. Over the last three years, Trion’s affiliated entities have acquired 31 properties and/or non-performing loans. Trion has successfully completed its transaction cycle—acquisition, obtaining the title and control of the asset, implementation of value-add procedures, and disposition—on 20 of those acquisitions. The principals of Trion Properties are Max Sharkansky and Mitch Paskover, two real estate professionals with over 30 years of combined experience in finance, acquisitions, management and redevelopment. Additional information is available at http://www.trion-properties.com/
About Holualoa Companies
Holualoa Companies is a real estate investment firm managing assets that span the United States and Europe with offices in Santa Monica, Tucson, Phoenix, Hawaii, Geneva and Paris. With over $1.8 billion in real estate owned and managed, Holualoa invests strategically in office, retail, industrial, multifamily, hotel and mixed-use properties. With a 30-year track record of success, its skilled and ambitious management team produces steady results through unsteady markets by leveraging its talent and experience to serve its investors. Holualoa invests both directly and through joint ventures with operators. Additional information, is available at www.holualoa.com.