Trion Properties Acquires San Leandro Apartment Property for $36.6MM

Trion Properties, San Leandro, East Bay, DVO Real Estate

SAN LEANDRO, California (April 6, 2017) – Trion Properties, a private equity real estate firm with a niche focus on value-add multifamily investments, along with its joint-venture partner DVO Real Estate, a New York-based private real estate investment firm, has acquired Bel Brook and Hideaway Apartments, a 146-unit value-add multifamily property in the San Leandro submarket of the East Bay, for $36.6 million.

This is Trion Properties’ fourth Bay Area acquisition in less than 15 months, bringing its existing Bay Area multifamily portfolio to a total of 262 units, according to Max Sharkansky, Managing Partner at Trion Properties.

“San Leandro is thriving and experiencing tremendous revitalization, making it poised for long-term growth and investment potential,” says Sharkansky. “Located in the heart of the dynamic East Bay, this property is within walking distance to a BART station and a mile away from the San Leandro Technology Campus, a 750,000 square-foot mixed-use development which will bring an estimated 1,800 tech jobs to the area. The enormous job growth throughout this region is driving demand for quality housing located in close proximity to transit options and major employers.”

Sharkansky notes that the entire East Bay is undergoing rapid growth as major tech giants and employers expand their presence in this region. Uber will relocate its corporate headquarters to Oakland, while Tesla has brought thousands of high paying jobs to Fremont.

In addition to the region’s technology sector growth, San Leandro is home to three of the Bay Area’s largest craft breweries, a thriving downtown district with a host of retail and restaurant amenities, and the San Leandro Monarch Beach, a 40-acre mixed-use development anticipated to break ground this year.

“We are bullish on the East Bay and have a proven track record in this market,” continues Sharkansky, who notes that Trion recently acquired two value-add multifamily assets in Hayward and San Leandro last year.

“This property is located only a block away from our Metro348 property on the same street. Metro348 boasts a strong and diverse mix of tenants, many of whom work in the technology and healthcare industries, including employers such as Uber, Kaiser, and GE Health. Based on our enormous success in repositioning our existing Metro348 asset, the Bel Brook and Hideaway Apartments presents a unique opportunity for us to execute a similar value-add investment strategy and capitalize on the tremendous growth of this region, enabling us to generate strong cash flow and risk-adjusted returns to our investors.”

Sharkansky notes that it is rare to source a multifamily asset of this quality and vintage in a supply-constrained market such as the East Bay, where demand for quality housing continues to outpace supply. The property’s close proximity to Trion’s other East Bay assets will allow the firm to amass economies of scale and strengthen its operational efficiencies, according to Sharkansky.

Built in 1967 and 94 percent occupied at acquisition, this well-maintained community has strong in-place cash flow with tremendous upside potential, allowing Trion to strategically upgrade the property in order to bring rents up to market and increase net operating income.

The firm plans to modernize the property through strategic interior and exterior renovations to create a best-in-class San Leandro community. Interior renovations include the installation of new vinyl wood plank flooring, stainless steel kitchen appliances, modern cabinetry, high-end finishes, and bathroom upgrades.
In addition to these interior upgrades, Trion will completely rebrand the property through exterior improvements, including the installation of new signage, as well as significant upgrades to the leasing office, pool, fitness center, and recreational center.

“Our vertically integrated property management platform will enable us to reposition this community and provide competitive amenities that improve quality of life, allowing us to create a better end product for our residents,” confirms Sharkansky. “Ultimately, this acquisition is well aligned with our strategy of targeting well-located assets with strong value-add potential, then investing in strategic renovations to enhance asset quality and drive long-term value.”

The apartment community is located at 77-85 Estabrook Street in San Leandro, California. Trion Properties and joint-venture equity partner DVO Real Estate acquired this property from the John Sullivan family. Acquisition financing was arranged by Continental Partners through NXT Capital. John Leyvas Jr. and Brad Lehman of Newmark, Cornish and Carey represented both the buyer and the seller in this 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 more than $130 million in assets 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 38 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 22 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 DVO Real Estate
DVO Real Estate is a real estate investment firm founded by industry veteran David Valger in 2012. The firm provides structured equity solutions for institutional quality, multifamily assets located in top-tier growth markets throughout the U.S. DVO targets middle market properties where maximum value can be created through renovation, repositioning and recapitalization strategies. The firm focuses on providing downside protection with upside participation and seeks to provide capital preservation and consistent cash flow.

DVO’s team is made up of highly experienced real estate investors with more than 100 years of combined experience in the industry, including 30,000+ apartment units and $6+ billion of real estate and private equity transactions. Additional information is available at www.dvorealestate.com or by calling +1.212.391.0902.