Riaz Capital Buys Downtown Berkeley Apartments for Bargain

Riaz Capital bought an apartment complex in downtown Berkeley for 20 percent under the property’s assessed value amid a wave of distress in the market.

An affiliate of the Oakland-based real estate manager bought the Dwight apartments for $37.8 million, the Mercury News reported. That works out to $381,600 per unit for the 99-unit property at 2121 Dwight Way. The seller’s identity wasn’t disclosed.

The multifamily market in the Bay Area, particularly the East Bay, hit a patch of rough waters over the past year. While some properties are trading hands, albeit at lower prices than their assessed values, many property owners have fallen into loan default and faced foreclosure.

Slow job growth when apartment development has outpaced demand is part of the problem, according to Marcus & Millichap. Higher vacancy rates across the Bay Area have weakened rental levels in certain areas, creating financial hurdles for apartment owners attempting to repay mortgages.

So far this month, several multifamily properties in the region have traded hands.

Last week, the 230-unit LINQ apartments in San Jose sold for $97.6 million, or more than $424,000 per unit. The buyer was a joint venture between Ethos Real Estate and Prospect Ridge, and the seller was an affiliate of Stockbridge Capital Group, which acquired the property for $104 million in 2019.

An Acacia Capital affiliate bought the Waymark apartment complex in Walnut Creek, dropping $190 million, or nearly $531,000 per unit, for the 358-unit property. Blake Griggs Properties and Transit Village Associates, the firms that developed the complex, sold the 2022-built property. That deal placed Waymark’s value at 15.1 percent lower than its estimated value of $223.8 million.

Earlier this month, Sack Capital Partners and Las Palmas Housing bought the 164-unit Fountain Park apartments in San Jose for $52 million, or $317,000 per unit. And a Greystar affiliate sold the 948-unit Park Kiely apartment complex in San Jose to Standard Communities, Housing on Merit and Vistria Real Estate for $370 million, or $390,300 per unit. That marked the highest amount paid for a multifamily property in Santa Clara County so far this year. — Chris Malone Méndez