Multifamily investment firm Security Properties and affordable housing nonprofit Hearthstone Housing Foundation jointly paid about $41 million to acquire more than 100 units of low-income senior housing, a sector with few recent deals in the local market.
Seattle-based Security and Newport Beach-based Hearthstone teamed up to purchase Monte Vista Gardens Senior Housing, 118 one-bedroom apartments in two complexes at 2605 La Hacienda Court and 2600 Nuestra Castillo Court in east San Jose. The seller was the project’s developer, a partnership of ROEM Development and the Foundation for Affordable Housing, according to documents filed with the Santa Clara County Clerk-Recorder’s Office on Aug. 31.
Completed in 2001 and 2003, the properties are a two-minute walk from each other and separated by a 144-unit apartment complex not included in the sale, title service records show. All but two of Monte Vista’s units are subject to affordability restrictions that cap rents at no more than 50 percent of the area median income, or $59,000 for a household of one, according to Santa Clara County’s 2022 state income limits and the properties’ bond financing terms.
The Foundation for Affordable Housing referred questions about the deal to ROEM, which didn’t respond to requests for comment. Monte Vista’s new owners also didn’t respond to requests for comment. Its affordability restrictions won’t expire for at least another 50 years, documents filed with the county Clerk-Recorder’s Office on Aug. 31 show. More than 90 percent of its rentable units are affordable to those on very low incomes, with the rest designated for extremely low-income households.
The deal is a rarity in San Jose’s multifamily sector: Of the almost two dozen sales of more than 20 apartment units in San Jose from September 2020 to July, only one was for senior housing, according to data CBRE shared with The Real Deal at the end of July. In that sale, Silver Tree Residential paid about $47 million, or more than $336,000 a unit, to acquire the 140-unit Redwood Senior Apartments at 814 Saint Elizabeth Drive from John Stewart Company.
By comparison, Monte Vista’s new owners paid nearly $350,000 a unit to purchase it. The Mogharebi Group’s Alex Mogharebi and Otto Ozen represented the seller.
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