Grosvenor Americas Grabs 195-Unit M-F Property in Bay Area
- Aug 30, 2013
Grosvenor Americas is no stranger to California’s Bay area, but it did not have a multi-family presence in the region until now. The real estate company has just entered the apartment market in the area with the acquisition of Carlmont Woods Apartments in Belmont, an affluent submarket within the San Francisco Bay Peninsula. GA picked up the 195-residence asset from Essex Property Trust.
“We have been looking to enter the Bay Area market for some time now,” Peter Staver, Investments, GA, told Commercial Property Executive. And for good reason.
“We were attracted to the area because of the strong employment growth and high barriers to entry for new development,” he added. “Belmont was attractive in particular due to its strong demographics and regional accessibility. Residents can access employment centers in both San Francisco, San Jose and all along the peninsula.” That’s not to say that there isn’t a solid corporate base closer to home. Belmont’s location in San Mateo County places it in the midst of a leading high-tech employment hub that includes the likes of Oracle, Electronic Arts and Sony.
Carrying the address of 2515 Carlmont Dr., Carlmont Woods is tucked away on 11.5 acres in the Belmont Hills. Demand in the area is among the strongest in the U.S. In San Mateo County, the average vacancy rate was just 3.1 percent in the second quarter, according to a report by commercial real estate services firm Cassidy Turley.
In terms of dollar signs, GA isn’t talking about it; Eastdil Secured, which marketed Carlmont Woods on Essex’s behalf, isn’t talking about it either. No one’s talking purchase price for the 42-year-old apartment community, which Essex had snapped up in 2004 as part of a $130 million, three-property portfolio acquisition. However, the transaction dovetails with GA’s investment objective of purchasing value-add properties below replacement cost. Still, it’s likely that the cost of Carlmont Woods was more than a drop in the bucket. The average price of apartment assets in San Mateo County in the second quarter was approximately $234,500 per unit, compared to the national average of $88,000 per unit, according to Cassidy Turley.
“Apartment acquisitions in the Bay Area are very competitive,” Staver said. “Investor competition is certainly pushing up pricing for value-add apartment communities such as Carlmont Woods.”
But it’s all worth it. “We believe the Bay Area will continue to demonstrate strong employment growth and apartment fundamentals,” he added.