Kennedy Wilson Pays $31M for Apartment Tower
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OAKLAND, CA-Beverly Hills-based international real estate investment and services firm Kennedy Wilson has acquired Regency Tower Apartments, a 178-unit apartment building here, for $31 million. The firm has not disclosed the seller, but industry sources not related to the deal report that Essex Apartment Value Fund II had purchased the building located at 333 E. 12th St. from Moison Investment Co. in February 2005 for $21.2 million.
The 18-story building, which was built in 1975, includes amenities such as a fitness center, dog park, pool and spa. Kennedy Wilson plans to spend more than $3 million in upgrades to the property, including completing unfinished unit renovations, rebranding the community, improving common areas and adding a resident lounge.
Fannie Mae provided a $23.5 million loan for the property at LIBOR + 2.07% for 10 years. The company invested approximately $8.8 million of equity in the transaction and plans to apply the excess funds (after paying the purchase price) toward closing costs, renovations at the property and other expenses.
“Oakland has enjoyed tremendous growth over the past two years,” said Bob Hart, president of KW Multifamily Management Group, in a prepared statement. “The area has experienced a gentrification and spillover effect from the rapidly increasing rents in San Francisco.”
Hart added that multifamily rent growth in Oakland was 10% in 2011 and 7.8% as of the first quarter of this year, the fourth-largest increase in the country. “With our deep experience in this market, coupled with our proven expertise in adding value to nearly 4,000 units in the East Bay over the past decade, Regency Tower is perfectly situated to complement our portfolio there. Additionally, rents at the property are currently below market with substantial upside.”
As GlobeSt.com previously reported, in July Kennedy Wilson and its partners acquired Via Verde, a 277-unit apartment complex in Huntington Beach, CA, for $65.7 million. The firm placed a $47.8-million 10-year loan on the property from Freddie Mac at 3.59%.
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