FAIRFIELD, CA—TruAmerica Multifamily, and the Guardian Life Insurance Company of America, continues its targeted Bay Area expansion with the $26 million acquisition of Summit at Paradise Valley, a 180-unit apartment complex in Fairfield.
The transaction was completed in partnership with Intercontinental Real Estate Corporation and benefits from attractive seven-year agency financing with full-term interest only payments arranged by Capital One Commercial Bank.
“Fairfield is somewhat of an undiscovered submarket where current conditions offer a tremendous investment opportunity,” says Greg Campbell, director of acquisitions at TruAmerica. “Rent growth in Vallejo-Fairfield is trending upwards in a pretty big way, and the submarket is ranked in the top six percent nationally in terms of vacancy projection for the next five years. At present, there are no new multifamily developments under construction in Fairfield, and ground-up development is very costly in the region’s current economic environment. The market conditions, coupled with a desirable location in close proximity to major employment centers and freeways, make Summit at Paradise Valley an excellent value-add investment opportunity.”
The 180-unit apartment complex consists of a mix of expansive one- and two-bedroom floor plans, which include enclosed garages on first floor units. Totaling 22 buildings on nearly 15 acres, the apartment community is comprised of two- and three-story structures set on an idyllic hillside. Distinguishing the property from other apartment communities in Fairfield, Summit at Paradise Valley offers residents a fully walkable neighborhood created by the major retail and entertainment center sited across the street. Residents will have access to abundant outdoor amenities—including a pool area, al fresco kitchen and a nearby dog-friendly walking path—to further embrace Northern California’s indoor/outdoor lifestyle.
TruAmerica plans to perform interior and exterior upgrades to bring the 1990s property more in line with competitors, which are commanding some of the highest rents in the submarket. For a property of its size, Summit at Paradise Valley offers a wide variety of common areas. TruAmerica will refresh the two-level fitness center, leasing office, large clubhouse, pool area that will include an outdoor kitchen and additional outdoor recreational areas. Interior upgrades to the units, some of which are in original condition, will include modernized flooring and color palettes and contemporary kitchens. To capitalize on the demand for superior, well-located housing, TruAmerica will also implement a number of operational improvements at the property.
Fairfield, the midpoint between San Francisco and Sacramento, provides a short commute to major employment centers throughout the East Bay and Sacramento.
“The region’s strong market fundamentals and deep renter pool make this investment extremely attractive,” said Jessica Levin, director of acquisitions at Intercontinental Real Estate Corporation. TruAmerica plans to capitalize on the property’s proximity to highly trafficked Interstate 80, which is approximately one half mile away, by aggressively marketing to top employers throughout the region.
TruAmerica is an investment firm formed by industry veteran Robert Hart. The company has now purchased three multifamily assets representing nearly $103 million in investment value in the greater Bay Area over the last nine months. The other two Bay Area properties are Avenel Apartments in San Jose and The Vineyards in Gilroy, which were acquired in October and December 2013 respectively.