Hawkins Way Capital has paid $46.25 million to buy a 159-unit student-oriented apartment building in Berkeley.
The Beverly Hills-based investor bought the six-story Varsity Berkeley complex at 2024 Durant Avenue, just south of Downtown, the San Francisco Business Times reported. The seller was Cornerstone Real Estate Advisers, based in Connecticut.
The deal at Durant, between Milvia Street and Shattuck Avenue, works out to $290,881 per unit.
Cornerstone, a unit of North Carolina-based Barings, bought the newly built complex in 2015 for $51 million, or $320,754 per unit.
The purchase by Hawkins Way marks its fifth deal in Northern California. The investor plans to fold it into Found Study, its student-oriented brand, and hand off management to FCL Management.
Hawkins Way Capital also intends to pour an undisclosed sum to renovate apartments to enhance living conditions for students, as well as “increase the availability” of affordable housing, according to the Business Times.
It’s not clear how the new landlord will increase affordable housing availability at the complex. The 75,600-square-foot property, which has 24 more units than it has bathrooms, sits on half an acre, according to Redfin.
“This acquisition represents an opportunity for Hawkins Way Capital to create strategic value in a market where student housing demands continue to grow,” Ross Walker, managing partner of Hawkins Way Capital, told the Business Times.
Hawkins Way owns Found Study student housing complexes in San Francisco, plus two Found Hotels in the city’s Union Square and Nob Hill neighborhoods.
The tight student housing market in Berkeley has pushed students to double up in each room, according to the newspaper. In 2022, monthly rent on a three-bedroom apartment reached $9,150.
UC Berkeley provides housing for a fifth of its students, while aiming to construct rooms for 11,730 beds for students and faculty over the next 15 years.
This summer, the flagship UC campus completed Anchor House, a 772-unit student dorm for transfer students in time for its first class this fall.
Developers across the East Bay college town have filed scores of redevelopment projects to meet the rising demand for housing, including taller buildings or larger units for more college students.
This month, Rhode Island-based Gilbane revised its plans to build a 23-story, 148-unit highrise atop the shuttered California Theatre at 2113-2115 Kittredge Street, a half block west of the UC Berkeley campus.
Downtown Berkeley is growing taller faster than any other Bay Area city hub. As of last year, six buildings between 16 and 28 stories were proposed in Berkeley’s central core, including redevelopment of its historic movie theaters.
Hawkins Way Capital, founded by Walker and Karan Suri in 2011, has $3 billion in assets under management, according to its website.
In January, lender Barnett Capital filed a foreclosure lawsuit against an affiliate of Hawkins Way, claiming the firm failed to pay a $5.2 million loan tied to a 60-room Found Hotel run by Sonder in Chicago’s River North.
— Dana Bartholomew
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