Financial markets worldwide have seen dramatic volatility in this past 12 months. The Bay Area economy and new hiring have cooled, while the San Francisco housing and condo markets have started to normalize after four feverishly overheated years. We are hearing about a big jump in apartment vacancy rates, with more apartments for rent than we’ve seen in many years just as rental rates begin to decline from recent all-time peaks. As would be expected, preliminary indicators show a transition to a cooler market when it comes to apartment building sales activity. However, as illustrated in the charts below, we haven’t seen any significant changes in the statistics. The second half of 2016 will undoubtedly provide more insight regarding the speed and scale of any market condition changes. San Francisco multifamily assets that contained more than five units experienced a plateau in cap rates year over year between 2015 and 2016. However, this same product experienced an increase in dollars per square foot, price per unit and average sale prices. The politics of new home development in San Francisco are not for the weak of heart. There are vocal disagreements between neighborhood and homeowner associations, developers, affordable housing advocates, tenant’s …
CITRUS HEIGHTS, CALIF., AND CORVALLIS, ORE. — Summit Healthcare REIT has acquired 20 percent interest in two seniors housing communities — Sun Oak Senior Living and Regent Court Senior Living— for $23 million. Summit, a non-traded REIT based in Lake Forest, Calif., acquired the interest from an undisclosed, publicly traded REIT. The two properties are leased to Compass Senior Living, an Oregon-based operator. Sun Oak Senior Living is a 78-bed assisted living and memory care community in the Sacramento suburb of Citrus Heights. Regent Court is a 48-bed memory care community in Corvallis, approximately midway between Portland and Eugene. Capital One – Healthcare Financial Solutions LLC provided financing for the transaction. Blueprint Healthcare Real Estate Advisors, a brokerage firm based in Chicago, arranged the deal. Tim Cobb led the Blueprint team.
SCOTTSDALE, ARIZ. — Equus Capital Partners has sold Scottsdale Financial Center, a 107,000-square-foot office building, for an undisclosed sum. The Class A building is located at 4110 N. Scottsdale Road in Scottsdale. It is 93 percent leased. The buyer was Alternative Investments & Manager Selection Real Estate Group, a business unit within Goldman Sachs Asset Management.
HILO, HAWAII — DoubleTree by Hilton has opened the Grand Naniloa Hotel Hilo, a 320-room hotel on the Big Island of Hawaii. The historic property recently underwent a $30 million renovation. The hotel includes Hilo’s only nine-hole golf course, along with a swimming pool and fitness center. It is located at 93 Banyan Drive. WHR LLC owns the property, which Aqua-Aston Hospitality manages.
SAN BERNARDINO, CALIF. — A private investor has acquired the 80-unit Hillside Apartments in San Bernardino for $10.2 million. The community is located at 2156-2196 Kendall Drive. It is situated just one mile from Cal State San Bernardino. Warren Berzack of Berzack Investment Property Advisors and Slavic Zlatkin of Lee & Associates represented the buyer. Lee’s Ryan O’Connor represented the seller, SB Hillside Properties, in this transaction.
CASA GRANDE, ARIZ. — Commercial Properties Inc. (CPI) has arranged the sale of a 12,849-square-foot strip center located in Casa Grande. The property was fully occupied at the time of sale by tenants including Cold Stone Creamery, UPS Store, Supercuts and Firehouse Subs. Sarge Glenn of CPI’s Industrial Team represented the seller, LBUBS 2004-C8 Retail 1664 LLC. Mike Sayre of Cushman & Wakefield represented the buyer, SimonMed Imaging, which purchased the property for $1.8 million.
BALTIMORE — A partnership between funds managed by Ares Management and TruAmerica Multifamily has purchased a 1,402-unit multifamily portfolio in suburban Baltimore for $236 million. The acquisition included Dominion at Eden Brook and Dominion Kings Place in Columbia, Lakeside Mill in Owings Mills, Ellicott Grove in Ellicott City, Arborview at Riverside & Liriope in Belcamp and Dominion Constant Friendship in Abingdon. The partnership will implement a multimillion-dollar renovation and repositioning program across the portfolio. Exterior upgrades will consist of landscaping, painting, updated signage and common area updates. Approximately half of the residential units will be renovated to include new appliance packages, faux-wood hard-surface flooring, new countertops and upgrades to existing cabinets.
WASHINGTON, D.C. — New York Life Real Estate Investors has originated two 15-year loans totaling $90 million for a pair of office buildings in downtown Washington, D.C.’s central business district. The properties include a recently renovated, 10-story building at 1620 Eye St. N.W. and a 12-story building at 1156 15th St. N.W. New York Life Real Estate Investors originated the loans on behalf of the borrower, TF Cornerstone Inc.
CHARLESTON, S.C. — Blackbaud, a Charleston-based cloud software provider for nonprofits and similar organizations, has selected Holder Properties to develop the company’s new corporate campus in Charleston. Blackbaud’s new campus will consist of a two-phase project situated on 13 acres in the Daniel Island community. Phase I will consist of a four-story, 172,000-square-foot office building and a 650-space surface parking lot located at the corner of Fairchild and Central Island streets. The site is planned to accommodate a second phase expansion for up to 175,000 square feet of additional office space. Construction began in October and Blackbaud will occupy the building upon its completion in the first quarter of 2018. The project team includes architect ASD and general contractor Balfour Beatty. Lee Allen, Chase Monroe, Graham Summers, Denice Michel and John Robinson of JLL represented Blackbaud in the transaction.
OXFORD, MISS. — A joint venture between Homestead Development Partners, Columbus Pacific and Kayne Anderson Real Estate Advisors is set to develop HELiX Oxford, a 790-bed student housing community located near the University of Mississippi in Oxford. The property will offer one-, two- and four-bedroom, fully furnished flats and townhomes. Community amenities will include a circular, beach-entry pool; a health and fitness center with cross fit space, multipurpose yoga studio and cardio and weight equipment; study labs devoted to individual, small and large group study; an interactive gaming center; media center; event space; and a summer kitchen. The project is scheduled for completion in fall 2018. The architect for the development is Charlan Brock and Associates, and Childs Dreyfus Group will be in charge of interior design. The project team includes general contractor The Construction Enterprises Inc., engineer Williams Engineering Consultants and landscape architect Dalhoff Thomas Design Studio. Asset Campus Housing has been tapped to manage the property upon completion.