Builder sells 260-unit apartment complex in South San Francisco

North Carolina firm pays $206M for one of the few multifamily projects around biotech hub

San Francisco /
May.May 13, 2022 03:55 PM
Bell Partners president and ceo Lili F. Dunn with renderings of Cadence Apartments at 400 Cypress Avenue in South San Francisco (Chet Frohlich, Bell Partners Inc.)
Bell Partners president and ceo Lili F. Dunn with renderings of Cadence Apartments at 400 Cypress Avenue in South San Francisco (Chet Frohlich, Bell Partners Inc.)

A North Carolina investor has bought a 260-unit apartment complex in South San Francisco for $206 million.

Bell Partners, a multifamily asset management firm based in Greensboro, bought the two-building complex at 400 Cypress Ave. after competitive bidding, the San Francisco Business Times reported. The cost came out to $793,000 per unit.

The seller was San Mateo developer Sares Regis Group of Northern California, which built the seven-story Cadence Apartments in 2019.

The complex of one-, two- and three-bedroom units is a short walk from the city’s new Caltrain station and less than two miles away from Oyster Point and the headquarters of Genentech.

Occupancy rates at Cadence, to be renamed Bell South City, hover between 90 percent and 95 percent, said Drew Hudacek, chief investment officer of development properties for Sares Regis.

“Biotech is one of the few industries where people have still been going into work-––so that did very well for Cadence,” Hudacek told the newspaper.

Bell, which has rental properties in the North and East Bay, saw a unique opportunity in Cadence, said Nickolay Bochilo, executive VP of investments. The modern apartment complex sits within five or 10 miles of a biotech cluster of about 200 South San Francisco companies.

But despite a booming local economy and tens of thousands of workers drawn to the life sciences hub over the next decade, its housing stock is mostly single-family homes, he said.

Brett Betzler, a senior managing director with brokerage firm Berkadia Institutional Solutions, represented Sares Regis and its capital partner AFL-CIO Building Trust Investment in the sale.

He said the pool of housing options available to workers at Oyster Point and beyond is likely to remain largely stagnant for the next few years, with projects in the South San Francisco area beyond were put on pause during the pandemic.

The disruption could prove a long-term obstacle given the rising construction costs and interest rates. He believes it could be as long as three-and-a-half years before renters see significant new residential supply come online in the Bay Area.

“There have been no groundbreakings of new developments in two years,” Betzler said. “It’s not like a light switch, where you flip it back on and go break ground.”

A second phase of Sares Regis’ Cadence project, a 195-unit apartment building at 401 Cypress Ave., is under construction, Hudacek said, but may not be finished for two more years.

Early this year, the South San Francisco City Council approved a ballot measure for November that would allow the city to develop, build or buy housing units, to make them more affordable to workers.

[San Francisco Business Times] – Dana Bartholomew





    Related Articles

    arrow_forward_ios
    Charlotte and the late George Shultz with 999 Green Street (Getty, Google Maps)
    SF penthouses owned by George, Charlotte Shultz listed for $29M
    SF penthouses owned by George, Charlotte Shultz listed for $29M
    Inn by the Coliseum at 4801 Coliseum Way in Oakland with Gov. Gavin Newsom (Getty, All Hotels California)
    Oakland gets $11M to convert hotel into homeless housing
    Oakland gets $11M to convert hotel into homeless housing
    Rendering of project at 1567 California Street (David Baker Architects)
    Redevelopment to bring 100 apartments to SF’s Polk Gulch
    Redevelopment to bring 100 apartments to SF’s Polk Gulch
    ROEM's Robert Emami with 800-803 Belmont Avenue (Facebook, ROEM)
    Affordable housing complex approved for site in Belmont
    Affordable housing complex approved for site in Belmont
    Top row (from left): Greg Lynn, Alla Gershberg, Nina Hatvany and Dale Bouetiette; bottom row (from left): Frank Nolan, Aaron Bellings, and Michael Bellings (Compass, Sotheby's Realty, Team Hatvany)
    Here are San Francisco’s top-ranked resi teams
    Here are San Francisco’s top-ranked resi teams
    722 Steiner Street on Alamo Square (iStock)
    Postcard ready: Another Alamo Square “Painted Lady” hits the market
    Postcard ready: Another Alamo Square “Painted Lady” hits the market
    San Jose Mayor Sam Liccardo (Getty)
    San Jose, Santa Clara to end housing cap, allowing 32K homes in North San Jose
    San Jose, Santa Clara to end housing cap, allowing 32K homes in North San Jose
    2000 Washington Street (Jacob Elliot)
    Deja vu on $25M ask for Pacific Heights penthouse
    Deja vu on $25M ask for Pacific Heights penthouse
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...