LA-based Decron Properties just spent $63M for a pair of Walnut Creek apartment buildings and is now halfway to its goal of buying $350M of Bay Area multifamily assets this year. (What have you done this month?)
The 251-unit buy comes weeks after Decron's first Bay Area purchase, picking up a 187-unit apartment building in Mountain View for $86M. Decron had been focused on entering the submarket for more than 18 months. Here's CEO David Nagel speaking at the YULA High School Golf Tournament in LA (Decron is the lead sponsor each year). David says Walnut Creek in-place rents are 20% to 25% below market and premiums can be achieved with thoughtful capital improvements and proper management. The buy also takes place as the company has sold off $109M in retail assets in SoCal.
The portfolio consists of the 152-unit Creekside Glen complex and the 99-unit Cypress Creek complex, both located within a mile of downtown Walnut Creek and adjacent to the Walnut Creek BART Station. Decron plans to invest up to $16M to upgrade the '60s-era properties. David says his firm has watched the run-up in rents in S.F. and renters are simply priced out, with the East Bay poised to take advantage as the more affordable option.
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