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SAN FRANCISCO-Two garden-style apartment properties here changed hands recently for $27.8 million, according to Arroyo & Coates, the brokerage firm with the disposition assignment. The properties, Cobblestone Village and Willow Creek, have a combined 178 units and are located approximately one mile apart, just off the Herndon and Nees Avenue corridors of North Fresno.

The new owner is a Fresno, CA-based private investment group that obtained acquisition financing through PNC ARCS. The seller was Equity Residential, a Chicago-based apartment REIT that is selling assets in order to preserve and build liquidity. Curtis Gardner, Mark Leary and John Downing of Arroyo & Cates’ Apartment Marketing Group had the disposition assignment.

Cobblestone Village is a 162-unit property that sold for $15.45 million, which equates to $95,401 per unit and $101 per sf. This price equates to a 6.1% cap rate initially. Willow Creek is a 116-unit property that sold for $12.34 million or $106,422 per unit and $104 per sf. The new owner’s initial capitalization rate on Willow Creek is 6.6%.

Cobblestone Village was built in 1983 at 7095 N. Fruit Ave. and features one-bedroom and two-bedroom floor plans averaging 945 sf. All units include a full size or stackable washer & dryer, central heat and air conditioning, a wood burning fireplace, a private patio or terrace, and a carport parking space. Community amenities include two swimming pools, two Jacuzzis and a fitness center. Willow Creek was completed in 1984 at 540 E. Nees Ave. and offers one-bedroom and two-bedroom units averaging 1,021 sf. All residences feature a stackable washer & dryer, central heat and air conditioning, a fireplace, a patio or terrace and a one-car garage. Community amenities include a swimming pool, a Jacuzzi, and a fitness center.

Equity Residential sold 11 properties in the third quarter–nine in Austin, essentially completing its exit from that market, one in Denver and one in Sacramento–and acquired none. The 11 properties included 3,513 apartment units, according its SEC filings. The aggregate sales price was $328.5 million. The buyers’ average capitalization rate was 5.9%. Equity’s unlevered internal rate of return on the dispositions was 10.8%.

Through the first nine months of the year, Equity Residential has sold 34 properties, consisting of 8,795 apartment units, for an aggregate sale price of $807 million. The average cap rate on the sales was 5.8%. The company’s average unlevered IRR was 10.8%. The company expects to sell another $200 million worth of properties before the end of the year.

“To preserve and build liquidity, we continue to sell properties and not buy,” Equity Residential CEO David Neithercut told analysts late last week. “For only the second time in our history, we did not buy a single asset in the quarter, and we have reduced our full year acquisition expectations to $400 million (from $750 million stated in the second quarter conference call). Again, this is down mainly due to our desire to protect our liquidity position given the uncertainty in the credit markets.”

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