SAN JOSE, CA-Two Bay Area apartment complexes have traded for an aggregate of $69 million in two separate deals recently. BRE Properties, an apartment REIT based in San Francisco, bought the 226-unit Fountains at River Oaks apartments in San Jose for $50.3 million; in San Mateoa a 135-unit seniors project called FountainGlen at the Villa has sold for $18.75 million.

BRE assumed an existing $32.5 million mortgage that bears interest at 5.74% and matures in 2019 in its acquisition of the Fountains at River Oaks. The property, which was built in 1990, comprises 24 garden-style two- and three-story wood-framed buildings on 8.18 acres.

BRE plans to invest additional capital over the next two years to renovate the community. The initial year-one capitalization rate on the investment is approximately 5.2%. After completion of the renovation, BRE expects to achieve a stabilized capitalization rate of approximately 6.1%.

Stephen Dominiak, EVP and chief investment officer for BRE, points out that the company's new asset is located in an area of Silicon Valley known as the "innovation triangle," within three miles of major technology employers including Cisco Systems’ world headquarters, Oracle (Sun), Intel, Applied Materials, Lockheed Martin and Cadence Design Systems; the Great Mall of the Bay Area is two miles from the property. He adds that the location is near another recent BRE acquisition, the 117-unit Museum Park in San Jose, which the company bought for $29.6 million in April and "provides BRE with operational and staffing efficiencies."

In the sale of the FountainGlen at The Villa, Hendricks & Partners reports that SF El Camino 12-B LLC bought the property, which is at 4000 S. El Camino Real in San Mateo, from FGP Mateo Villa LLC. The property is one of San Mateo’s newest senior 55-plus complexes and includes retail space in addition to the living units.

The transaction was negotiated by Mark J. Feldman of the San Francisco-East Bay office of Hendricks & Partners and Peter Hauser of the company's Newport Beach office. The brokers note that the property, originally built in two phases in 1955 and 1982 as the 284-room Villa Hotel, has a storied past. "It played host to some of Hollywood’s biggest stars of the 1950s and 1960s," the Hendricks brokers point out.

In 2006, FountainGlen Properties began converting the property, which now has 121 market rate units and 14 affordable units, all of which have newly renovated interiors, along with a restaurant and six retail spaces. Residents also have access to a wide variety of shopping venues, restaurants, theater, mass transit, major employment centers, and medical facilities.