TruAmerica's $78M Bet Targets California Multifamily Market With No Deliveries Since 2000
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TruAmerica Multifamily has acquired Bridges at San Ramon for $78 million, a 200-unit multifamily community within the community of San Ramon, California. For the developer, it's an opportunity to take advantage of a market that hasn't seen new supply in over two decades, after investors engaged in a bidding war for the property.
Senior managing director Jason Parr, Managing Director Scott MacDonald, Associate Sydney Ladrech and director John Hansen of Berkadia in San Francisco arranged the sale on behalf of the seller.
San Ramon is a very thinly traded apartment market, Parr told GlobeSt.com. Within 1 mile walking distance of Bishop Ranch (a 10.39-acre space at 309 Springfield Dr.), the last property to sell was Bridges at San Ramon in April of 2011.
There have been zero market-rate multifamily deliveries since 2000. The majority of units delivered in the Tri-Valley East Bay region of the Bay Area are concentrated in Dublin, Livermore and Pleasanton.
There are very few developable multifamily sites within San Ramon, Parr said. Currently under construction is Avalon San Ramon, a project working on 456 luxury apartments that sits on a 5.7-acre site within Bishop Ranch.
Due to the rarity of the offering, the demand was resilient for Bridges at San Ramon, with over 30 tours, 19 offers and a competitive three-round buyer selection, according to Parr.
The transaction equated to $390,000 per unit.
"The combination of rarity, ability to add-value through interior renovation, and the Bay Area market's overall momentum and strong fundamentals, created very strong demand from investors," he said.
Investors had an opportunity to purchase a 200-unit garden-style community with 96% of units in classic condition and situated immediately adjacent to Bishop Ranch, the East Bay's most dynamic micro-location, Parr said, citing the asset's value.
Benefiting from over $2.3 million in recent capital improvements, Bridges at San Ramon generates durable cash flows while offering the potential to capture $925,000 in annual income upside through a comprehensive interior renovation program.
"The property's future performance is supported by a fundamental rental supply imbalance and a significant barrier to homeownership driving durable, long-term renter demand," Parr said.
Located on 10.39 acres at 309 Springfield Drive, the 1988-built property is a two-story, garden-style community offering one- and two-bedroom apartments averaging approximately 739 square feet.
Apartment interiors feature in-unit washer and dryers, stainless steel appliances, wood-style flooring and private patios or balconies, with large closets and fireplaces available in select units. Community amenities include a pool and spa, fitness center, courtyard and barbecue area, playground, pet spa and EV charging stations.
The property is adjacent to Bishop Ranch, one of the East Bay's largest employment and commercial hubs, home to major employers including SAP, John Muir Health, AT&T, PG&E and Five9.
As of the latest available data, Bishop Ranch's post-pandemic recovery outpaced both San Francisco and Silicon Valley, according to a release.
Residents are also within walking distance of City Center Bishop Ranch, a premier retail, dining and entertainment destination featuring upscale retailers including Whole Foods, Equinox, Williams Sonoma, Heller Jewelers & Rolex, Alys Grace and more.
San Ramon was ranked the No. 1 place to live in Contra Costa County, according to Niche.com and offers A+-rated public schools, more than 60 parks and open spaces and convenient connectivity throughout the Tri-Valley.
Source: GlobeSt/ALM