Capri Capital Nabs '360 Residences' Mixed-Use Project in San Jose for $118M

360 Residences, a mixed-use apartment high-rise in downtown San Jose, has come under the ownership of Capri Capital, courtesy of a $118 million transaction. Capri purchased the upscale multi-family property from SJ Real Estate Partners, a subsidiary of Kennedy Wilson.

By Barbra Murray, Contributing Editor

It’s new, it’s nearly completely leased and now, its belongs to Capri Capital. 360 Residences, a mixed-use apartment high-rise in downtown San Jose, has come under the real estate investment advisory firm’s ownership, courtesy of a $118 million transaction. Capri purchased the upscale multi-family property from SJ Real Estate Partners L.L.C., a subsidiary of Kennedy Wilson Inc.

In addition to its premier quality, enviable occupancy level of 97 percent and 10,600 square feet of commercial/retail space, the residential destination at 360 S. Market St. scores high in another all-important category — location. The property, sited on one acre near Caltrain and a light-rail network, makes its home in pricey Santa Clara County, where the average year-over-year rental rate for larger apartment properties jumped 12 percent in 2011, according to a report by commercial real estate services firm Cassidy Turley. At 360 Residences, rates top a monthly $3,000.

Alas, Capri has gotten its hands on a veritable cash machine. Developed in 2010, 360 Residences was originally conceived as a condominium project; however, after acquiring the first trust deed on the asset and putting on finishing touches with a $2 million investment, SJ Real Estate transformed the property into a rental. Soon after, 360 Residences was stabilized.

Capri can expect the good times to continue for its newly acquire asset. “It is in Santa Clara County where we have seen the greatest employment growth over the past year and this is just one of the factors why this market is ahead of the curve,” the Cassidy Turley report noted. Investors are salivating. “Deal activity continues to be negatively impacted by the lack of available stabilized product within the marketplace, particularly Class A and B apartment complexes — which is where investor demand is strongest. Strong investor demand for multi-family product is also driving pricing up for all but the most challenged properties.” Investment sales volume in the fourth quarter alone soared to more than $418 million.