East Bay Rents Push Renters Farther Out to the Benefit of Investors
Vista Investment Group in partnership with Tokyu Land US Corporation purchased Northridge Apartments in response to renters who have been priced out of the expensive markets of San Francisco and Oakland.
PLEASANT HILL, CA—Equity Residential has owned Northridge Apartments for more than 20 years. The firm recently sold the 221-unit garden-style community for $91 million to Vista Investment Group in partnership with Tokyu Land US Corporation. This marks Vista and Tokyu’s first partnership.
“Renters who have been priced out of expensive markets like San Francisco and Oakland are migrating to the East Bay in search of more affordable alternatives,” said Jonathan Barach, Vista Investment Group president. “They are finding that Pleasant Hill has a great school system, a robust amenity base and rents at a considerable discount to neighboring cities Walnut Creek, Lafayette and Orinda.”
Built in 1974, the Northridge Apartments are located at 235 Camelback Rd. The studio, one-, two- and three-bedroom apartment homes are situated in 16 low-rise residential buildings on a 6.63-acre site. Common area amenities include a clubhouse, two swimming pools, fitness center and laundry facilities. Vista’s capital improvement plan includes upgrading common areas, amenities and renovating apartment interiors as units roll.
“This acquisition fits well within our value-add investment strategy, and marks our first acquisition in the Bay Area,” says Nobuhide Kashiwagi, president of Tokyu Land.
The property is adjacent to Diablo Valley College, 2.5 miles from the Concord BART station and minutes to Interstate 680, which leads to major employment centers in Walnut Creek and the Tri-Valley.
The Pleasant Hill Shopping Center is within walking distance, and the Sun Valley and Willows shopping centers are within 1.5 miles. Pleasant Hill’s downtown corridor, located 2.2 miles from Northridge, features a pedestrian-friendly retail district with more than 40 dining, shopping and entertainment options anchored by a Century 16 theater.
Stanford Jones, Salvatore Saglimbeni, Philip Saglimbeni and Alex Tartaglia from Institutional Property Advisors, a division of Marcus & Millichap, represented the seller.
“The property’s attractive location combined with the ongoing need for high-quality, affordable multifamily assets make it an ideal value-add opportunity for Vista and TLUS,” says Salvatore Saglimbeni.
Northridge Apartments is the latest in a series of West Coast multifamily acquisitions totaling more than $160 million since the beginning of the year for Los Angeles-based Vista Investment Group. The other assets are located in Portland, OR, and Los Angeles. Vista Investment Group’s portfolio includes more than 2,000 multifamily units and approximately 1.8 million square feet of office space throughout the West Coast, including 670,000 square feet of Bay Area office space.
“Northridge gave us the opportunity to get back into the Bay Area from the multifamily side,” Barach tells GlobeSt.com. “We sold a deal there in 2016 and did very well, but it has been extremely competitive getting invested back into that market. It also gave us the opportunity to work with a new partner in Tokyu Land US. I think it is going to be a great long-term partnership for Vista.”
Strong asset appreciation continues to drive apartment investment in the East Bay as the average price per unit has risen 25% to $290,600 since the end of 2016, according to a report by Marcus & Millichap.