Reporter- San Francisco Business Times
Kennedy Wilson snapped up the Kirker Creek Apartments, a 542-unit multifamily community in Pittsburg for $96.5 million or about $178,000 per unit — one of the biggest East Bay apartment sales in years.
The global investor owns more than 18,000 units in its portfolio with about 4,900 units in the East Bay.
“Kennedy Wilson will continue to benefit from the tremendous rental growth that the San Francisco and East Bay markets have experienced over the last few years, including over 9 percent in Pittsburg alone,” said Kurt Zech, president of Kennedy Wilson’s Multifamily Management Group.
The seller in the deal, Sares Regis Group, bought the property in 2005 for $72.5 million. Kennedy Wilson put $21.2 million of its own money into the deal and secured a $77.2 million ten-year loan from Fannie Mae at 3.78 percent with interest only for five years.
The property includes one- and two-bedroom units averaging 945 square feet. Amenities include gated entry, three pools, a gym, clubhouse, television lounge, racquetball courts and business center.
Investors such as Kennedy Wilson have been hungry to buy up institutional grade assets in markets where they see rents going up.
“We’re absolutely seeing investors migrating to secondary and tertiary markets,” outside of the core Bay Area, said Todd Vitzthum, a broker with Cushman and Wakefield specializing in multifamily properties. Prices for apartment buildings have shot up in places like San Francisco, so prospective buyers won’t see much upside on buying buildings at this point. On the other hand, the East Bay still has potential for properties to rise in value.
Blanca Torres covers East Bay real estate for the San Francisco Business Times.
Article source: http://www.bizjournals.com/sanfrancisco/blog/real-estate/2014/07/kennedy-wilson-buys-east-bay-apartments-pittsburg.html?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+industry_20+(Industry+Commercial+Real+Estate)