The Pacific Companies will build a 164-unit affordable apartment complex in East San Jose because of a ground-lease with Safehold, which bought the land beneath.
The Idaho-based affordable housing developer led by Caleb Roope will move forward on the six-story complex at 2880 Alum Rock Avenue after the New York-based real estate investment trust bought the dirt, the San Jose Mercury News reported. A small commercial building would be bulldozed.
The parent company of Pacific West Communities had cut a deal with Safehold this month for four ground leases that will allow the developer to build 781 affordable homes at three sites in San Jose and one in Concord, The Real Deal reported.
Safehold declined to disclose to TRD where the homes would be built, what it paid for the land and the terms of the ground leases to The Pacific Companies. The tight-lipped deal marks Safehold’s fifth with Pacific in the Bay Area.
With the ground leases, Safehold buys the underlying land for the project from The Pacific Companies, who then gets a new source of capital for the project. Though the developer has to pay ground rent on the land, that cost is typically lower than a traditional loan.
“We are thrilled to expand our relationship with The Pacific Companies, and to play a role in meeting the significant unmet demand for affordable housing,” Steve Wylder, a Safehold executive vice president and head of investments, told the Mercury News.
Plans for the $98.6 million project in East San Jose calls for 164 affordable apartments for households that earn between 30 and 70 percent of area median income.
The 1.3-acre project will include 92 studio, 58 one-bedroom and 14 two-bedroom units, plus 7,500-square feet of shops and restaurants, according to a city report. An underground garage would serve 42 cars, while a parking lot would serve 60 more.
Read more
Residential
San Francisco
Pacific Companies signs Safehold ground leases for four Bay Area affordable developments
Residential
San Francisco
Pacific West and nonprofit builder land $71M for San Jose apartments
Development
San Francisco
Maracor, Pacific West land $66M in financing for affordable complex in San Jose
In Santa Clara County, the area median income for a household of four was $184,300. This indicates the income targets for the project’s affordable homes would range from about $54,400 to $126,900 a year, according to the Mercury News.
The Pacific Companies, founded by Roope in 1998, has developed more than 300 affordable apartment projects, with 23,500 units in 11 western states and Hawaii, according to its website.
— Dana Bartholomew