FOSTER CITY, CALIF. — Essex Property Trust (NYSE: ESS), a multifamily REIT based in Palo Alto, Calif., has sold Harbor Cove Apartment Homes, a 400-unit waterfront apartment complex in Foster City. Essex sold the Bay Area property to a fund sponsored by Acacia Capital Corp. for $138 million, or $345,000 per unit.
The apartment community is located on a 15-acre site at 900 E. Hillside Blvd. in Foster City, which is about midway between San Francisco to the north and Silicon Valley to the south. The $138 million sale is the largest transaction by dollar volume in the Bay Area so far this year, according to Essex’s broker, Institutional Property Advisors (IPA).
“Opportunities to acquire larger multifamily assets in the mid-peninsula market are extremely rare. In fact, Harbor Cove is the only 100 plus-unit asset that has traded hands in Foster City since 2004,” says Philip Saglimbeni, vice president of investments at IPA, which is the multifamily brokerage division of Calabasas, Calif.-based Marcus & Millichap Real Estate Investment Services. IPA serves institutional and major private investors, such as Essex.
Saglimbeni represented Essex alongside Stanford Jones and Salvatore Saglimbeni of IPA. The brokerage team of Jones, Saglimbeni and Saglimbeni has brokered the sale of seven other communities in the Bay Area so far this year, with more than $300 million in pending closings.
“Despite significant volatility in the capital markets over the past few months, we continue to see very strong and qualified activity on well-located assets positioned to capitalize on the Bay Area’s vibrant economy,” says Jones. “The primary acquisition premise for Harbor Cove is based on an extensive renovation strategy, which is driven by wide spreads to Class A rents in the immediate market. Furthermore, Harbor Cove’s micro-location is arguably the best in Foster City, boasting dramatic waterfront views, award-winning schools and immediate access to both retail and employers.”
Harbor Cove was built in 1971 on the waterfront of Central Lake, Foster City’s largest lake. About 30 percent of the units have full or partial views of the lake, and every resident has direct private access to the lakefront recreation area.
The complex also features an outdoor swimming pool with a sundeck, barbecue and picnic area with a gazebo, a sand volleyball court, two tennis courts, extra storage, carports, open-space parking and a renovated clubhouse with a lounge, kitchen area and fitness center. The community’s floor plans average 767 square feet and each unit has a private balcony or patio.
Acacia Capital Corp.’s investment funds have acquired real estate debt and equity interests in excess of $4.5 billion, according to the company’s website. The company’s primary focus is in residential land and apartment communities.
Essex Property Trust acquires, develops, redevelops and manages multifamily residential properties in select West Coast markets. The REIT currently has ownership interests in 164 apartment communities with an additional nine properties in various stages of development. The company’s stock price closed Monday at $156.56 per share, up slightly from when it traded at $151.48 per share this time last year.
— John Nelson