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REA
July 24, 2019  

Silicon Valley Apartments Fetch Top Dollar

A year-old luxury apartment complex and marina on San Francisco Bay changed hands last week for $326 million.

Boston advisory shop GID acquired the 402-unit waterfront community, in Redwood City, Calif., from its developer, a joint venture between Fortress Investment of New York and Pauls Corp. of Denver. Newmark brokered the deal, whose price translates to $811,000/unit.

The sale was the third-highest price ever paid for an apartment complex in Silicon Valley, according to Real Estate Alert’s Deal Database. The record was set in 2016 when an Abu Dhabi Investment Authority partnership acquired the 1,813-unit Woodland Park in East Palo Alto, Calif., from Equity Residential of Chicago for $412.5 million, or $228,000/unit. The second-largest deal was last year’s sale of the 700-unit El Rancho Verde in San Jose for $370 million, $529,000/unit. WNC & Associates of Irvine, Calif., acquired that property from Clark Realty Capital of Arlington, Va.

GID’s purchase was also the second-highest price on a per-unit basis, after a DWS Group partnership’s 2015 acquisition of the 296-unit Sharon Green Apartments from Essex Property of San Mateo, Calif., for $828,000/unit, or $245 million.

The property acquired by GID, at One Blu Harbor Boulevard, is along Redwood Creek, an inlet of San Francisco Bay. The apartments, which are 97% occupied, range from 702-square-foot studios to 1,428-sf units with three bedrooms. The average asking rent is $4,011. Units feature stainless-steel appliances, hardwood floors, walk-in closets and oversize windows with solar shades. Tenants have an average annual income of $144,000 and an average age of 33.

Amenities include a saltwater pool surrounded by a sundeck with cabanas, a heated spa, a fitness center, a dog-washing station, bike storage, a spin studio, and an outdoor yoga and meditation deck. The property includes a marina with 64 concrete berths that are 35 feet wide and up. Monthly rents start at $11 per foot.

The complex, called Blu Harbor by Windsor, is adjacent to the 3,000-acre Bair Island Wildlife Refuge and along Highway 101. It’s within 10 miles of major employers in Palo Alto, Menlo Park and San Mateo.