The James in San Jose Sold to Investors

Two apartment investors have joined forces to buy a 190-unit apartment complex in San Jose for just over $74 million, adding to the string of apartment sales in the South Bay city this year.

Larkspur-based Virtú Investments and Beverly Hills-based Archway Equities teamed up to buy The James, a Fairfield Residential-developed property completed in 2019, according to a press release from the buyers. The community is located at 98 N. First Street in the downtown area. Financing was by Freddie Mac and arranged by Brian Eisendrath of Institutional Property Advisors.

San Francisco-based Berkadia agents Brett Betzler, Kaohu Berg-Hee and Rachel Parsons marketed the property for Fairfield, which was only on the market for a few weeks, according to an Archway rep. The asking price was not disclosed.

The six-story 160,000-square-foot complex was 95% leased at closing, according to the press release.

This was the second big buy for Archway in California this year, after it bought The Paseos at Montclair North in the Inland Empire in May for $150 million. The James and The Paseos both sold for just under $390,000 per unit.

“More and more sellers are meeting the market,” Archway President Sean Moghavem said in a statement. “[This has] created selective opportunities to acquire high-quality assets in supply-constrained coastal markets with strong multifamily fundamentals at prices where we can still generate attractive risk-adjusted returns for our investors despite today’s high interest rate environment.”

Virtú Investments will manage the property through its in-house property management firm North Coast, according to the press release.
The average tenant in The James earns about $175,000, according to Berkadia, and the property was “expressly designed to appeal to the luxury urban renter” with high-end finishes and common area amenities. There’s also a 251-space underground garage and over 7,000-square-feet of street-level retail.

Even though the South Bay rental market has been on the rebound this year, average rents at the property are still 20 percent below peak levels from January 2020, according to the Berkadia marketing site for the property.