Who Says Commercial Real Estate is on the Wane?
Blu Harbor, a 402-unit multifamily community in Redwood City, has sold for $325.6 million to GID, a Boston investment firm, by the partnership of Pauls Corporation and Fortress Investment Group.
REDWOOD CITY, CA—There has been a bit of hand-wringing about “will it or won’t it?” in recent months. The “it” of course, being the Bay Area commercial real estate market. However, a recent transaction should dispel those worries ever so slightly.
Blu Harbor, a 402-unit multifamily community at 1 Blu Harbor Blvd. in Redwood City, has sold for $325.6 million. The buyer was GID, a privately held real estate investment firm headquartered in Boston. The seller was a partnership between Pauls Corporation, a capital management and real estate development firm based in Denver, and Fortress Investment Group, an investment manager headquartered in New York.
“Our data shows this is the largest multifamily deal in Redwood City’s entire history. It’s also one of the largest deals in San Mateo County in 2019,” Andrea Arata, NKF San Francisco director of research, tells GlobeSt.com.
Situated on more than 3,200 linear feet of shoreline, Blu Harbor features a mix of studio, one-bedroom, two-bedroom and three-bedroom apartment homes. Rents are at an above-average rate here, with 566-square-foot studios going for approximately $3,300 in the complex, GlobeSt.com learns.
Its amenity package includes a saltwater pool with sundeck, a fitness center with a spin studio, an outdoor kitchen, a sports lounge, complimentary kayaks, a boat launch and marina outfitted with 64 boat slips.
Situated on the east side of Highway 101 adjacent to a 3,000-acre ecological reserve, Blu Harbor also has direct access to local employers and lifestyle amenities along the mid-Peninsula. The property is a few minutes’ drive or bike ride of downtown Redwood City, which during the past few years has emerged as the epicenter for some of Silicon Valley’s most significant tech companies, and has become increasingly more attractive among the young, affluent demographic that now defines the region.
The unemployment rate in San Francisco-Redwood City-South San Francisco was 2.2% in June 2019, up from a revised 1.8% in May 2019, and below the year-ago estimate of 2.5%, according to a report by the California Employment Development Department. This compares with an unadjusted unemployment rate of 4.1% for California and 3.8% for the nation during the same period. The unemployment rate was 2.3% in San Francisco County and 2.2% in San Mateo County.
Between May 2019 and June 2019, the total number of jobs in the San Francisco-Redwood City-South San Francisco metropolitan divisions, which includes the counties of San Francisco and San Mateo, increased by 5,000 jobs to total 1.188 million jobs.
The Newmark Knight Frank investment sales team, led by executive managing director John McCulloch, executive managing director Mark Leary and director Rob LeDoux served as the exclusive advisors on the Blue Harbor transaction. Newmark Knight Frank’s debt and structured finance team, led by vice chairman Ramsey Daya, senior managing director Chris Moritz and director Travis Bailey, secured long-term debt financing for GID.
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