REAL ESTATE NEWS

Customized marketing strategies for available commercial real estate can be advantageous when they make sense.

The Mogharebi Group used such a tactic last week for when brokering the $34.6 million sale of Willow Grove Apartments, a 158-unit multifamily community located at 3400 Coffee Rd. in Modesto, California.

The seller, a privately held real estate investment firm based in Northern California, chose to divest the asset as part of its strategy to diversify holdings outside of California. In this case, it had owned the property since 2017.

“From time to time, we do get special marketing requests and custom-tailor a marketing approach for the asset,” Mogharebi Executive Vice President Otto Ozen told GlobeSt.com. “There is no 'one-size fits all' approach.”

Ozen said the advantage is that it keeps disruptions to a minimum for the owners who want to be discreet and are concerned about operations.

“The disadvantages are that it requires more strategic planning and that the process can take longer,” Ozen said. “However, with a targeted marketing approach, we can zero in on the precise capital source—the institutional or private buyer in exchange—will pay a premium for the asset’s specific value proposition.

Approximately 200 potential buyers were contacted for Willow Grove Apartments.

Strong Value-Add Potential

Willow Grove’s appeal to investors lies in its strong value-add potential in Stanislaus County, according to Ozen.

“The county has a more favorable income-to-rent ratio in a low-supply market, allowing a new owner to capitalize on the upside by executing interior and common-area renovations,” he said.

“This strategy provides a substantial advantage as renovating an existing asset is significantly more cost-effective than new ground-up construction in the current environment. The approach is highly effective due to the region’s low vacancy rates and consistent migration from high-cost Bay Area markets, ensuring robust rental demand and maximum return on investment.”

Willow Grove Apartments was built in 1990 and comprises 18 two and three-story buildings offering spacious one- and two-bedroom floor plans ranging from 700 to 900 square feet.

Modesto’s multifamily market overall is strong, with an average vacancy rate of just 3.6%—well below the national average of 4.9% projected for year-end 2025. Consistent population growth over the past 10 years and a dearth of new construction, driven by high barriers to entry, are driving growth.

According to Stanislaus County, which includes Modesto, the market needed approximately 20,000 new affordable rental homes to keep up with demand as of 2024.

Ozen, along with Nazli Santana and Brian Nakamura, collectively represented the seller in the transaction.

Source: GlobeSt/ALM