Stockton Begins to Come Around to Face Recovery

STOCKTON, CA—In a sign that Stockton could be bouncing back after declaring bankruptcy more than four years ago, a multifamily transaction tops the charts as the largest multifamily investment transaction in Stockton in the past five years. ROEM Development Corp. recently acquired the Polo Run Apartment complex in this once-bankrupt municipality, and will transition its 320 units to affordable housing.

“Stockton's emerging economic recovery provided ROEM with new opportunities to acquire existing apartments there,” ROEM executive vice president Alex Sanchez tells GlobeSt.com. “We believe private capital and equity investors will continue to see the positive change in Stockton, and ROEM is delighted to be a part of that success. For example, Polo Run's tax exempt financing was quickly and professionally handled by Stockton's mayor and city council, a great sign that they are responsive to business proposals.”

The seller was Polo Run LLC, a private multifamily investment firm in Stockton. The total value of the transaction was $20.55 million, according to Colliers International.

“Stockton, like most Northern California cities, has experienced unprecedented and explosive rental rate growth over the past few years, making it less affordable to the residents that need it most,” said Mark J. Feldman, senior vice president, Colliers International. “This sizable transaction is another positive step for the city of Stockton, which emerged from bankruptcy protection less than two years ago. The city was victim to the housing downturn and overzealous municipal spending, but as economic conditions continue to improve, transactions like this show the city is again on the brink, but this time it's the brink of a full economic recovery.”

Like the relatively few development firms that do have affordable and senior housing design/build capabilities, as well as experience in market-rate housing, Santa Clara-based ROEM will receive low-income housing tax credits allowing it to fund a complete renovation of the interiors and exteriors of the Polo Run units. The units are designated for tenants earning up to 60% of the median household income of San Joaquin County, which stands at $53,253, according to the state's department of housing and community development.

“Tenants whose income is higher than the tax credit allowable limits set by HUD and the county are eligible to receive a relocation stipend from the new owner to move out before their lease expires,” Feldman tells GlobeSt.com. “If those higher income tenants don't accept the stipend and their lease expires, their leases are not renewed and they move out. The rents do decrease on some of the unit types now that Polo Run is fully going affordable.”

Polo Run is located at the center of Stockton–the Valley Oak district–known for its numerous parks and close proximity to Highway 99. Hammer Lane, bordering the southern end of the property, is a corridor in the city connecting Highway 99 on the east to Interstate 5 on the west.

“Stockton, especially with its deep-water port capacity, is a rapidly evolving city of 300,000 people and is widely considered to be the economic, political and social epicenter of California's Central Valley, which is otherwise known as the breadbasket to the world,” Feldman added.

Built in 1979 and renovated during the last five years, Polo Run is a gated apartment community featuring two pools and spas, a fitness center, a clubhouse, and two community barbecue areas. The property also offers four laundry rooms, along with 51 of the units having washer/dryer hookups.

Spanning 19 acres and 34 buildings, the property includes a wide variety of apartment units, including two studio units, 96 one-bedroom units, 30 two-bedroom/one-bath units, 160 two-bedroom/two-bath units and 32 three-bedroom/two-bath units. Square footage ranges from 400 for the studios to 1,125 for the three-bedroom units.

Feldman led a team of Colliers brokers in representing both parties to the transaction. He was joined on the Colliers team by senior vice president Adam Lucatello and associate vice president Andy Hodgson, both based in the brokerage firm's Stockton office, in representing ROEM as well as the seller, Polo Run LLC, a private investment firm based in Stockton.

ROEM Development Corp. is one of the most active full-service design-build firms serving California's vastly under-served affordable and senior housing sectors.

STOCKTON, CA—In a sign that Stockton could be bouncing back after declaring bankruptcy more than four years ago, a multifamily transaction tops the charts as the largest multifamily investment transaction in Stockton in the past five years. ROEM Development Corp. recently acquired the Polo Run Apartment complex in this once-bankrupt municipality, and will transition its 320 units to affordable housing.

“Stockton's emerging economic recovery provided ROEM with new opportunities to acquire existing apartments there,” ROEM executive vice president Alex Sanchez tells GlobeSt.com. “We believe private capital and equity investors will continue to see the positive change in Stockton, and ROEM is delighted to be a part of that success. For example, Polo Run's tax exempt financing was quickly and professionally handled by Stockton's mayor and city council, a great sign that they are responsive to business proposals.”

The seller was Polo Run LLC, a private multifamily investment firm in Stockton. The total value of the transaction was $20.55 million, according to Colliers International.

“Stockton, like most Northern California cities, has experienced unprecedented and explosive rental rate growth over the past few years, making it less affordable to the residents that need it most,” said Mark J. Feldman, senior vice president, Colliers International. “This sizable transaction is another positive step for the city of Stockton, which emerged from bankruptcy protection less than two years ago. The city was victim to the housing downturn and overzealous municipal spending, but as economic conditions continue to improve, transactions like this show the city is again on the brink, but this time it's the brink of a full economic recovery.”

Like the relatively few development firms that do have affordable and senior housing design/build capabilities, as well as experience in market-rate housing, Santa Clara-based ROEM will receive low-income housing tax credits allowing it to fund a complete renovation of the interiors and exteriors of the Polo Run units. The units are designated for tenants earning up to 60% of the median household income of San Joaquin County, which stands at $53,253, according to the state's department of housing and community development.

“Tenants whose income is higher than the tax credit allowable limits set by HUD and the county are eligible to receive a relocation stipend from the new owner to move out before their lease expires,” Feldman tells GlobeSt.com. “If those higher income tenants don't accept the stipend and their lease expires, their leases are not renewed and they move out. The rents do decrease on some of the unit types now that Polo Run is fully going affordable.”

Polo Run is located at the center of Stockton–the Valley Oak district–known for its numerous parks and close proximity to Highway 99. Hammer Lane, bordering the southern end of the property, is a corridor in the city connecting Highway 99 on the east to Interstate 5 on the west.

“Stockton, especially with its deep-water port capacity, is a rapidly evolving city of 300,000 people and is widely considered to be the economic, political and social epicenter of California's Central Valley, which is otherwise known as the breadbasket to the world,” Feldman added.

Built in 1979 and renovated during the last five years, Polo Run is a gated apartment community featuring two pools and spas, a fitness center, a clubhouse, and two community barbecue areas. The property also offers four laundry rooms, along with 51 of the units having washer/dryer hookups.

Spanning 19 acres and 34 buildings, the property includes a wide variety of apartment units, including two studio units, 96 one-bedroom units, 30 two-bedroom/one-bath units, 160 two-bedroom/two-bath units and 32 three-bedroom/two-bath units. Square footage ranges from 400 for the studios to 1,125 for the three-bedroom units.

Feldman led a team of Colliers brokers in representing both parties to the transaction. He was joined on the Colliers team by senior vice president Adam Lucatello and associate vice president Andy Hodgson, both based in the brokerage firm's Stockton office, in representing ROEM as well as the seller, Polo Run LLC, a private investment firm based in Stockton.

ROEM Development Corp. is one of the most active full-service design-build firms serving California's vastly under-served affordable and senior housing sectors.