Community College District Pays $67M for Silicon Valley Multifamily

A Silicon Valley community college district has decided to pay more than $60 million for affordable apartments in Cupertino, rather than build them for student housing.

The Foothill-De Anza Community College District board voted to spend $66.7 million for the 94-unit McClellan Terrace Apartments at 7918 McClellan Road, the Silicon Valley Business Journal reported.

The seller is Prometheus Real Estate Group, based in San Mateo, which signed a non-binding letter of intent with the district, which serves students from Palo Alto to San Jose.

The pending off-market purchase works out to $709,574 per unit. Colliers is handling the sale.

Foothill-DeAnza budgeted $28 million for renovations, according to a memo, which will make the complex accessibility compliant and add safety features to the swimming pool.

It will finance the acquisition and renovations from an $898 million bond measure approved in 2020.

The college district had considered building its own student housing until soaring construction costs and a potential delay in plans to move in by 2028 move-in date pushed the district board to opt to buy instead. The cost of a proposed apartment development was not disclosed.

The 100,000-square-foot McClellan Terrace Apartments, built in 1971 on 5 acres, has one- and two-bedroom units. The 94-unit property has the potential for 332 beds, not far from the 144-unit and 376-bed apartment building the school had considered building.

It’s also closer to Foothill-De Anza Community College than the proposed building site, a seven-minute walk from the college compared to the 4 miles students would have to drive from the undisclosed building site.

Foothill-DeAnza intends to start renting the apartments to students in August and September, prior to the fall semester.

— Dana Bartholomew