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| 555 Apartments, formerly Meritage Apartments, Milpitas, CA |
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| Marshall Boyd |
Los Altos, CA –
Institutional fund manager Interstate Equities Corporation (IEC) has acquired a
137-unit, value-add multifamily property in Milpitas for $46 million.
The property, formerly
called Meritage Apartments, will be rebranded to “555 Apartments.” The asset was acquired through IEC Institutional
Fund III, L.P., a fully discretionary, $200 million commingled fund that closed
earlier this year.
“Despite being net
sellers, we have been actively acquiring assets that meet our investment
criteria over the past few months, and this acquisition brings our total equity
committed to roughly fifteen percent,” says Marshall Boyd, Co-President of IEC, who notes that this translates
to an additional $600m of buying power in this fund which will be deployed over
the next several years.
“While we continue to
expand our multifamily portfolio, we are also taking a selective approach to
new acquisitions,” says Boyd. “Our investment strategy is to target unrenovated
or partially renovated apartment communities consisting of 20 to 400 units,
located in coastal infill markets that are demonstrating steady growth and are
resilient to economic pressures.
“By adhering to this
thesis, we are able to deliver attractive returns to our limited partners.”
Boyd notes that Milpitas
is a prime example of a market in Santa Clara County that is poised for
economic growth, adding that technology sector job growth and a new BART
station make this a fundamentally durable location for multifamily investments.
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| Julia Boyd Corso |
“Milpitas is a dynamic
submarket that is gaining ascendancy in the Bay Area,” explains Boyd.
“Situated
between the East Bay and Silicon Valley, Milpitas is uniquely positioned to
cater to the increasing demand for quality housing near major tech employers in
both regions.
“The rising employment
growth in this market, coupled with the availability of mass transit options
linking both Fremont and San Jose will drive resident demand for this asset.”
Julia Boyd Corso, Co-President of IEC, notes that the strength of the market and the
asset’s value-add potential resulted in strong competition for this
acquisition.
“There were a number of
bidders for this asset,” explains Boyd Corso. “As the only discretionary
capital, we were able to differentiate ourselves through surety of close.
"In addition, our familiarity with this market
and product type enabled us to emerge as the right buyer.”
Built in 1973, “555
Apartments” will undergo a series of capital improvements as part of IEC’s
value-add investment strategy.
“We can
substantially increase rents through operational improvements, rebranding, and
management efficiencies,” says Boyd Corso.
“By revitalizing the property, we are improving quality of life for
current residents and delivering a product that will attract renters throughout
the Bay Area.”
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| Salvatore Saglimbeni |
Salvatore Saglimbeni, Stanford Jones, and Philip Saglimbeni of Institutional Property Advisors, as well as Carlos Azucena of Marcus and Millichap brokered the transaction.
In addition to the
Milpitas asset, IEC has acquired four value-add multifamily properties
throughout Northern and Southern California through IEC Institutional Fund III,
L.P., bringing the total number of units acquired for this fund to date to 240.
For a complete copy of the company’s news release,
please contact:
Katie Kea or Jenn Quader
Brower, Miller & Cole
(949) 955-7940