When Redwood City’s Buckingham Apartments was built in 1964, Lyndon B. Johnson was the president and man was still five years away from walking on the moon.
But there’s plenty of life left in such older properties. At least, that’s what an investor is betting on following the purchase of the 48-unit complex for $15 million, $312,500 per unit.
The buyer is Trion Properties, a Los Angeles-based private equity firm that buys such “value-add” deals, according to a news release. The company plans to pump money into renovations in order to attract heftier rent checks. (It’s currently leasing for about 40 percent below market.)
“The Bay Area is one of the strongest markets in the country,” saidMax Sharkansky, managing partner at Trion Properties, in a news release. “The region’s record-breaking job growth, coupled with its reputation as one of the nation’s largest technology hubs, is driving demand for centrally-located, high-quality housing near major employers.”
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One of those growing employers is Stanford University, which is planning a major campus for employees in the city, Sharkansky noted.
The property last sold in early 2015 to a private investor for $13.1 million, according to title records. Despite the run-up, and even with renovation costs, the property remains below “replacement cost” — or the cost to entitle and build from scratch, Trion said.
“By repositioning and renovating this asset, we plan to bring rents up to market value while delivering an institutional-quality product at a huge discount to newer construction,” said Farhan Mahmood, director of acquisitions at Trion Properties.
The news release said interior renovations will include vinyl wood plank flooring, modern cabinetry, quartz countertops, new kitchen appliances, and tonal painting. Trion will also build a new entryway, freshen up the hallways, and build a tenant lounge “to build a sense of community for residents, particularly catering to young working professionals,” the news release said.
Robert Johnston and Adam Levin of Marcus & Millichap represented both the buyer and the seller in this transaction; Continental Funding Group arranged the financing.
Founded in 2005, Trion has acquired more than 1,500 multifamily units and so far has repositioned and resold over 795 units.
Smallman Construction and Electric 