SAN RAFAEL, CA—The 45-year-old Marin Gardens Apartments has been acquired from a private family owner. The 46-unit multifamily community located at 124 Merrydale Rd. is still in its original condition, according to Interstate Equities Corporation (IEC), an institutional fund manager. Ryan Wagner of Colliers represented both the buyer and the seller in the transaction. The price was undisclosed.
Marshall Boyd, president of IEC, tells GlobeSt.com: “This acquisition is well aligned with our overall strategy to acquire well-located multifamily assets with strong value-add potential in our two niche markets, the Bay Area and Southern California. By focusing exclusively on these two markets, we are able to identify and acquire ‘diamonds in the rough’ that will deliver attractive yields and long-term value to our investors.”
According to IEC, few apartment communities in the 25- to 100-unit range are available for sale in Marin County. The reasoning is that families tend to own these types of properties for generations. Furthermore, identifying a property that has been kept in good condition but hasn’t been renovated is rare in the current multifamily market.
The Marin Gardens apartment community was 95% occupied at the time of the acquisition. IEC plans to implement immediate interior and exterior upgrades. With these upgrades and the market, IEC expects to grow rents steadily.
“Rent growth in San Francisco has been prodigious, and it’s our belief that market rent growth in Marin will increase at an accelerated rate relative to other parts of the Bay Area,” says IEC associate Ben Doran. “There are good renters with stable income in San Rafael, which fuels our confidence in continued renter demand at the property.”
IEC targeted the property because it is well positioned to remain competitive in the market. Class-A assets approximately 400 yards from Marin Gardens are charge asking rents twice as much as the current rents at Marin Gardens.
Founded in 1981, IEC is an institutional fund manager that invests in California apartment communities on behalf of endowments, foundations, family offices and pension funds. The firm has taken roughly 85 properties full cycle for its investors in more than $1.5 billion in real estate transactions since 2006.
This is the second transaction of note in San Rafael, CA this week.