Federal Realty Investment Trust has sold its apartment complex in San Jose called Levare for $74 million, as the company seeks to reallocate the proceeds toward better opportunities.
The REIT did not list the buyer, but the property was 95 percent leased at the time of the sale.
The Class A residential building features a total of 108 units. Levare lies within the Santana Row, a community that offers more than 2.5 million square feet of residential, hotel, office and retail space. The area attracts 8.5 million visits each year and features 662 rental units, 219 private condos, 30 restaurants, and 50 shops, according to Federal Realty.
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It's unclear what Eastdil Secured's exact involvement in the deal was, but Will Purcell, director at the CRE firm, said in Federal Realty's statement that Levare's "location within Santana Row—one of the most vibrant and proven mixed-use destinations in the country—made it a particularly compelling offering."
Federal Realty plans to reallocate the capital toward investments that it views as high-return upside. The North Bethesda, Maryland-based firm, which is mostly known for its retail and mixed-use assets, noted in a first-quarter earnings call that it had roughly $1.5 billion in liquidity available for potential future investments. Plus, CEO Donald Wood said that it was marketing $250 million in asset dispositions, with $150 million of it under contract, adding that funds could be allocated toward share buybacks, developments or other purchases. How and when the capital is used could depend on the opportunity and market conditions.
According to Federal Realty, it serves roughly 3,400 tenants across its 102 properties.
A RealPage market forecast expects rents to grow on average by 2.3 percent this year. Additionally, a handful of markets, including San Jose, are projected to stand out with rent growth exceeding 3.4 percent.
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