Trion Properties has sold two multifamily communities in the San Francisco Bay Area to Ascenda Capital for $86.5 million.
According to managing partner Max Sharkansky, the sales demonstrate Trion’s successful execution of value-add strategies throughout the ownership, achieving internal rates of return greater than 25%.
“We entered this market more than six years ago, recognizing significant interest from the area’s professionals for quality, upgraded apartments as an alternative to new construction,” said Sharkansky. “By leveraging our years of local experience and relationships in the East Bay, we were able to successfully bring these two assets full cycle despite the challenging economic conditions that have been prevalent in the Bay Area in recent years.”
The East Bay properties include the 146-unit Metro 77 & 85 Apartments in San Leandro and the 89-unit Andina Apartments in Hayward.
“While this market has trailed most of the nation in rent growth since late 2018, by strategically executing property-level renovations and improving operational efficiencies through our vertically integrated management program, we were able to achieve significant returns for our investors,” said managing partner Mitch Paskover. “The successful sales of these communities speak to Trion’s ability to increase multifamily property values in varying market conditions.”
The private equity real estate firm purchased Metro 77 & 85 in 2017 for $36 million and sold it for $53 million. The community is in a prime location, within walking distance to the San Leandro BART station and close to Interstate 880 and Interstate 580. Its value-add enhancements to the 1960s vintage asset included new signage; modern paint schemes; upgrades to the swimming pool, fitness center, leasing offices, and hallways; and modernizing unit interiors.
Units feature stainless steel appliances, quartz countertops, vinyl plank flooring, and large balconies and patios. In addition to the pool and fitness center, amenities include package lockers, a pet play area, laundry facilities, and assigned parking.
Robert Johnston and Adam Levin of Levin Johnston of Marcus & Millichap represented Trion as the seller.
Los Angeles-based Trion acquired Andina Apartments in 2019 for $28 million, selling it for $33.5 million. The value-add repositioning, which included 65% of the units, will provide the buyer with a cash-flowing asset and the opportunity to complete the renovation program.
“Since acquiring the asset, we invested in capital improvements to the property’s unit interiors and common area exteriors to meet the standards of today’s Bay Area renters,” said Sharkansky. “Of the 89 units, 58 are fully renovated and are achieving more than $225 premium over unrenovated units at the property.”
Units feature quartz countertops; stainless steel appliances; washers and dryers; vinyl plank flooring; new cabinet doors, bathroom vanities, lighting fixtures, and ceiling fans; upgraded plumbing hardware; reglazed tubs; Bluetooth locks; and oversized private patios or balconies. Amenities include covered parking, a swimming pool, a dog park, two rooftop decks, and outdoor barbecue and picnic areas.
Berkadia Institutional Services’ Brett Betzler represented Trion as the seller.
