Behind Rare $84M Podium Construction Water View Acquisition in Bay Area
Interstate Equities Corp.'s recent $83.5 million purchase of the apartment community The Dylan in San Francisco's East Bay area is more than just an opportunity in a limited-supply area. It's a market rarity, with its construction podium offering water views, which is key for Interstate.
JLL represented the seller, Hercules Development Partners, in the sale of the asset in the Hercules submarket and arranged the five-year acquisition loan through Freddie Mac.
JLL's Capital Markets Investment Sales and Advisory team representing the seller was led by Senior Managing Directors Ryan Wagner, Brandon Geraldo and Matt Kroger and Director Fatai Alashe.
"Properties like The Dylan are rare to trade in the Bay Area, in that podium construction assets with water views of the Bay are very rare," Wagner said.
"What made this sale unique was that Hercules is a small community in the East Bay where much of the housing is much newer than in surrounding communities such as Richmond, Pinole and El Sobrante."
This marks the first apartment transaction to take place in Hercules in five years.
A property, The Exchange, was the last community sold in this market, acquired by a group that converted the asset into a middle-income affordable property.
The Dylan, completed in 2022, is a five-story apartment community offering residents 217 market-rate units and 15 below-market-rate units.
JLL's market commentary further notes that no new apartment projects are currently under construction in Hercules, and the submarket shows limited new supply in the development pipeline.
The Dylan features a unit mix of studios, one and two-bedroom units, averaging 804 square feet per unit. On-site amenities include a lounge with a community kitchen; a sports lounge featuring darts, billiards and foosball; a high-performance fitness center; a resident courtyard featuring BBQ and fire pit areas and bike storage with a repair station.
The property is along San Pablo Bay at 2200 John Muir Parkway, providing residents with a distinctive waterfront lifestyle while maintaining excellent connectivity to major Bay Area employment centers.
JLL's Capital Markets Debt Advisory team representing the borrower was led by Executive Managing Director Charles Halladay and Director Matt Cimino.
Source: GlobeSt/ALM