by Nathan Donato-Weinstein –
East Palo Alto’s Woodland Park apartments — a massive collection of more than 1,800 rent-stabilized units — are about to change hands in a blockbuster deal that puts a new landlord in charge of more than half of the city’s multifamily rental housing stock. An affiliate of Menlo Park’s Sand Hill Property Co. is buying the sprawling neighborhood of apartment buildings from publicly traded Equity Residential, Sand Hill executives confirmed last week. Terms weren’t immediately disclosed. The yellow lines show the apartment assets included in Woodland Park, a collection of dozens of buildings in East Palo Alto, adjacent to Palo Alto. Enlarge The yellow lines show the apartment assets included in Woodland Park, a collection of… more
The transaction comes after years of landlord-tenant tensions over evictions, rent increases and displacement in Woodland Park — traditionally a bastion of relative affordability near the epicenter of Silicon Valley’s tech wealth. That history, and the size of the portfolio, guarantees that any new owner’s actions will be closely scrutinized by housing activists, public officials and tenants.
But Sand Hill executive Michael Kramer assuaged potential concerns over the new owner’s plans, saying in an interview that the the firm had no designs to tear down buildings, would not push out tenants and would follow “both the spirit and the letter” of East Palo Alto’s strict rent stabilization ordinance.
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“This is a fully leased, fully stabilized property, and we have no redevelopment plans,” Kramer said on Friday. “We’ll be making capital investments, and making sure it’s competitive in the market, but that’s all our plans.”
The transaction will give privately held Sand Hill and its financial backer — the U.S. subsidiary of the Abu Dhabi Investment Authority, or ADIA — a portfolio of 101 buildings on 49 acres situated west of Highway 101, and adjacent to Palo Alto, arguably Silicon Valley’s most prestigious address.
The deal is another example of a changing East Palo Alto, which was long plagued by high crime and poverty despite its prime Peninsula location. Now, slowly, investment is coming into the tiny city of 30,000 people after bypassing it during previous booms.
Currently, a new office campus from the Sobrato Organization is under construction at East Palo Alto’s University Avenue gateway — the first major new commercial project in years. For-sale home prices in the city are rising as tech workers seek out relatively affordable housing close to work. And the city is working on a plan to increase its water capacity, which has restricted growth for years.