Read Investments has bought a troubled 98-unit apartment building in Berkeley for $32 million — $19.5 million less than it traded for six years ago.
The locally based investor bought the Higby, an eight-story building at 3015 San Pablo Avenue, the San Jose Mercury News and San Francisco Business Times reported.
The seller was an affiliate of its lender, Union Life Insurance, which snatched the building in a deed-in-lieu of foreclosure last August from an unidentified landlord that failed to pay its bills.
The deal works out to $326,531 per unit.
The Higby last traded in 2019 for $51.5 million, or $525,510 per unit.
In January last year, the building was assessed at $55.5 million. When the property was seized by its lender in August, it was valued by Union Life at $36.2 million.
The $32 million sale is 42 percent below the assessed value of the building and 38 percent less than its last traded price.
Higby was built in 2015 by Portland-based Gerding Edlen, now known as Edlen & Company. Last year, Edlen surrendered a 24-story apartment high-rise at 1700 Webster Street in Oakland, after failing to pay a $90 million loan on the property.
The white and gray Higby now offers a month free rent and $1,500 for a newly signed lease, according to its website. Monthly rents range from $2,075 to $3,236, according to Apartments.com.
Multifamily properties in nearby Oakland have been selling at discount prices, following a glut in apartment construction.
The Martin Group bought a seven-story, 224-unit apartment building at 1889 Harrison Street in downtown Oakland last month for $61 million, half of its assessed value.
Three Steps Properties bought a 257-unit apartment at 447 17th Street for $99 million, more than half its assessed value.
But Berkeley, which has had a housing shortage for University of California, Berkeley, students and nonstudents, has undergone an apartment building boom, with large towers sprouting across town. It’s not clear if the steeply discounted multifamily sale on San Pablo is an indicator of a local market turn.
Read Investments, founded in 2015 by Peter and Steven Read, owns more than 2.5 million square feet of retail, multifamily and industrial real estate in Northern California, Oregon and Washington, according to its website.