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SAN FRANCISCO-The 3,221-unit Villas Parkmerced apartment development here has changed hands for a price believed to be between $186,000 and $195,000 per unit, or between $650 million and $680 million. A joint venture of locally based Carmel Partners and JP Morgan of Boston sold the 115-acre, 13-tower development to a joint venture of New York City-based Stellar Management and Rockpoint Group, a Boston-based investment and management firm.

Located near San Francisco State University, Stonestown Galleria, Lake Merced Park and four golf courses, Villas Parkmerced is the largest contiguous residential apartment community in San Francisco and one of the largest on the West Coast. The rent-controlled property is 98% leased. Parties involved declined to release the sale price or confirm the estimated range provided to GlobeSt.com by industry sources familiar with the transaction.

Carmel and money partner JP Morgan Strategic Property Fund acquired the complex from Leona Helmsley in 1999 for $350 million and have since invested some $50 million into the property. To defray some of the rehabilitation costs, Carmel sold off between 150- and 160 units to neighbor San Francisco State University for $20 million.

“We built a new clubhouse and a Montessori school, put in all new irrigation, sewers, painted everything and renovated all hallways and entranceways,” Carmel Partners managing principal John Williams told GlobeSt.com last month . The new clubhouse includes a fitness center, business center, demonstration kitchen, billiards room, Internet access and a movie theater.

Apartment units have parquet flooring, over-sized windows, walk-in closets and large living areas. Units average 1,000 sf and come in 35 different floor plans ranging from studios to three bedrooms. In addition to the clubhouse and Montessori school, onsite amenities include bus and rail stops and shuttles to BART, and an 18,000-sf retail center that was not included in the sale.

Stellar Management principal Robert Rosania tells GlobeSt.com that the new ownership plans to continue renovating the property’s units and common areas and will examine potential on-site development opportunities, though declined to provide any further detail. “It’s a vast piece of real estate,” he says.

Douglas Harmon and Jeff Weber from the New York-based Eastdil Realty represented the seller. Alliance Residential will manage and lease the property.

Stellar Management is a privately held real estate owner operator based in New York City that was founded in 1985. The company owns approximately 16,500 multi-family apartment units and 3 million sf of class A office space in New York City, San Francisco and Washington, DC.

Rockpoint Group LLC is a global real estate investment and management firm that is investing its second fund. The company targets value-add opportunities, distressed/restructuring opportunities “and complex situations across all asset classes and geographic regions.”

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