Windy Hill secures $105M loan for Belmont apartment project

Hedge fund Värde Partners is adding to its Bay Area investments with $105 million in construction takeout refinancing on Windy Hill Property Ventures’ Artisan Crossing apartment complex in Belmont. 

The floating-rate bridge loan has a three-year initial term with two one-year extension options. It will support the lease-up of the recently completed 250-unit multifamily property, according to a Värde press release. The deal was led by JLL’s Chris Gandy and Tom Gilliland.

Jon Miller, managing director at Värde, called the new development at 1325 Old County Road a “rare institutionally scaled Mid-Peninsula multifamily community in the high-demand Silicon Valley housing market,” in a statement. 

Minneapolis-based Värde typically does several deals each year in the Bay Area across a variety of asset types, according to a company rep. The global alternative investment firm currently manages more than $13 billion in assets across North America, Europe and Asia Pacific, according to the release. 

Windy Hill began construction on Artisan Crossing in 2021 after getting a $131 million loan, originated by Square Mile Capital and in partnership with Bank OZK, according to news reports at the time. The Palo Alto-based developer currently owns 10 other apartment complexes, all in San Mateo and Santa Clara counties, according to its website. 

Located a few blocks from the Belmont Caltrain station, Artisan Crossing has asking rents that range from $2,900 for a studio to more than $5,000 for a two-bedroom, according to the leasing site. It offers up to 10 weeks free rent on select floor plans. Amenities include a swimming pool, fitness center, conference room with “work pods,” clubhouse, recreation room with a pool table, package lockers and pet spa. 

The average rent in Belmont is about $2,500 for studios and one-bedrooms and $3,400 for two-bedrooms, according to Zumper data. The median rent across all units types is just over $3,000, an 8 percent increase compared to last year. 

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Silicon Valley’s rental market has heated up with the return of in-office work combined with VC firms’ continued investment in AI, cybersecurity and climate tech. The multifamily occupancy rate is 95.1 percent and very few new units are coming to market, according to Yardi data. 

Unit turnover takes an average of 40 days and each available unit attracts 12 prospective renters, the most competitive market in the state and sixth most competitive in the country, according to Yardi subsidiary RentCafe. That’s up from 21st place just one year ago. Lease renewals are also up 8.4 percent from last year to 54.1 percent.