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East Bay apartment complex sells for $304M, to be converted into ‘missing middle’ housing
Acquisition is largest yet for partnership aiming to create more housing in California for people making low-to-moderate incomes
A partnership that’s aiming to create more middle-income housing in California made its largest acquisition yet: almost 500 apartments in the East Bay city of Pleasant Hill for $304 million.
Opportunity Housing Group and the California Statewide Communities Development Authority bought the 484-unit Wood Creek Apartments, the sixth multifamily complex the pair purchased last year. The deal closed Dec. 28, the group said in a Jan. 11 news release. The seller was Equity Residential, the San Francisco Business Times reported, citing Securities and Exchange Commission filings.
The partnership will reserve Wood Creek’s units for residents and families making up to 80, 100 and 120 percent of the local median household income, which in Pleasant Hill was about $119,000 from 2015-2019, the latest U.S. Census Bureau data show. Existing residents won’t be displaced, and only income-qualified tenants will be able to lease units at discounted rates, Opportunity Housing Group’s Lauren Seaver told the Business Times.
The group and the development authority expect the property to be fully leased to income-qualified tenants in the next two to three years, Seaver told the publication. The complex at 637 Stonebridge Way is more than 95 percent occupied, and average rents are almost $2,700 a month, Seaver, the group’s co-founder, said.
The development authority financed the complex’s purchase through its workforce housing program, which is intended to make existing market-rate homes affordable for California’s “missing middle” demographic — people making between 60 and 120 percent of the local median income who don’t qualify for state or federal rental assistance programs and, therefore, can struggle to find housing affordable to them.
More than 30 percent of the Bay Area workforce, or more than 1.5 million people, are part of this demographic, and new residential projects designed for that group remain scarce, Seaver said in an interview in September.
With the Wood Creek acquisition, the partnership’s joint portfolio now encompasses about 1,600 units across California, representing an approximately $920 million investment, Seaver told the Business Times. Opportunity Housing Group is in charge of managing the portfolio, while the development authority issues municipal bonds to finance the acquisition of existing market-rate housing assets.
The pair aim to “greatly exceed” 2021’s transaction volume this year, Seaver said in the release, adding that “we can’t find and acquire these middle-income properties fast enough.”
Philip and Salvatore Saglimbeni, Stanford Jones and Alex Tartaglia of Institutional Property Advisors’ Northern California team brokered the sale of Wood Creek, the release said.
[San Francisco Business Times] — Matthew Niksa