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Waterford puts $280M more into “workforce housing”

Buys 480-unit complex in Pasadena from Equity Residential, plans conversion under state guidelines

From left: John Drachman and Sean Rawson, co-founders of Waterford Property Company, in front of the Watergate Apartments complex in Pasadena (Waterford Property, iStock)
From left: John Drachman and Sean Rawson, co-founders of Waterford Property Company, in front of the Watergate Apartments complex in Pasadena (Waterford Property, iStock)

Waterford Property Company is ending the year with a big check.

The firm, in partnership with the California Statewide Communities Development Authority, bought the 480-unit Watergate Apartments complex in Pasadena for $280 million, or $583,333 per unit, according to a Thursday announcement. The CSCDA funded the purchase using tax-exempt bonds.

The deal is more per unit than the highest-per-unit sale in Orange County this year, which was Intracorp’s $168 million acquisition of a luxury apartment complex in Fullerton that came out to $579,310 per unit in a submarket that compares with Pasadena.

Waterford got the Pasadena property, at 231 South De Lacey Avenue, from Equity Residential, which it had owned for over 15 years, records show.

Waterford will immediately lower rents for new residents who make between 60 and 120 percent of the area’s median income – roughly $41,000 to $82,000 annually, according to city data. Existing tenants that don’t meet the income restrictions can stay at the complex until they decide to leave, the release added.

Waterford will also designate 216 units to be rented to those who make 80 percent of the area’s median income or below, and 96 other units to tenants who make under 50 percent.

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This is the fourth complex in Pasadena that Waterford and the joint powers authority have acquired this year for conversion into workforce housing.

In June, the duo bought two complexes totaling 513 units for $335 million, and another 105-unit complex for $67 million in November.

The pair also own workforce housing complexes in Glendale, Pomona, Anaheim and Long Beach.

About 500,000 low-income households in California lack access to affordable housing, according to a report from the California Housing Partnership.

The CSCDA, a joint powers authority, works to address that by giving local government and private entities access to low-cost, tax-exempt project financing. In exchange, the private companies agree to lower rents for qualifying tenants.

Waterford is one of the CSCDA’s biggest partners on workforce housing. In total, the CSCDA has issued over $2.2 billion in tax-exempt bond financing for this type of housing, allowing Waterford to acquire over 3,700 units.

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Affordable HousingPasadena