Madison Realty Capital backs True Life on Bay Area resi

The True Life Companies got almost $80 million in loans from Madison Realty Capital for two Bay Area projects that combine more than 100 homes in Silicon Valley and the East Bay.

The Denver-based company secured $45 million in property acquisition and construction financing for a 50-unit townhome project in Sunnyvale in Silicon Valley, and $32 million for a development with slightly more homes in Hayward. True Life expects to break ground on both projects, which have received approvals in both cities, this fall, spokesperson Cynthia Keller told The Real Deal. True Life partnered with Hillwood Investment Properties for the Sunnyvale project, and with private equity firm 621 Capital for its Hayward plans.

True Life’s plans in Sunnyvale call for the redevelopment of an eastern section of the Fremont Corners strip mall at the East Fremont Avenue and Sunnyvale Saratoga Road into four buildings offering a mix of two-, three- and four-bedroom homes. Six of the units will be priced below market rates under city guidelines, and a structure with about 8,100 square feet of room for shops and restaurants is also planned.

True Life’s Sunnyvale townhome project (Robert Becker for SDG Architects)

In Hayward, the company is working on razing eight commercial, residential and storage structures to build 46 townhomes and nine so-called live/work units at 27177 and 27283 Mission Boulevard, directly behind an elementary school and across from a high school. Six townhomes will be affordable to those making moderate incomes, according to the project’s affordable housing plan.

The loans are the second and third that True Life has gotten from Madison for its Bay Area projects over the past year — the first was $105 million in construction financing for a 189-unit townhome-condo project in Hayward. The lending in the Bay Area furthers Madison’s push outside its home base of New York: In June, the firm loaned about $279 million to Reger Holdings for a series of multifamily projects and a luxury condominium in downtown Austin, Texas. Five months later, it provided about $183 million in financing to Scape North America, a unit of the British dorm developer, for an apartment project in downtown San Jose. It’s also done several deals in Los Angeles in recent months.

Demand for single-family homes in the Bay Area continues to steadily increase as major employers such as Apple, Google and LinkedIn expand in the region, Madison’s Josh Zegen wrote in a statement. To meet that demand, some companies are buying strip malls and other retail properties — or, in True Life’s case, parts of them — to redevelop them into new homes.

Prologis bought a 1.3-million-square-foot, mostly empty mall in Richmond in the East Bay last year for $117 million and discussed a plan with the city’s mayor before the deal closed to turn it into housing and a logistics facility, the San Francisco Business Times reported at the time.

True Life hasn’t set home prices for its Sunnyvale or Hayward projects yet, and has so far declined to disclose total costs. Madison declined to disclose its two loans’ terms. True Life’s Sunnyvale project is the first of two phases, the second consisting of 35 townhomes and about 3,400 square feet of new retail on the west side of Fremont Corners. The company filed initial plans for phase two in March 2021 before refining its proposal in December, which is under city review.

Gary Mozer, Miles Musalman and Evan Kinne of George Smith Partners brokered the True Life loan deal, a Madison spokesperson said.

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Hayward townhome-condo project lands $105M construction loan