Veritas Snaps Up Rent-Controlled Portfolio In Oakland
Cambridge Terrace Apartments, a 48-unit property in Oakland's Clinton neighborhood, and Vue de Lac Apartments, a 75-unit property near Lake Merritt, have sold to different buyers for a combined $29M, according to sources familiar with the transactions.
Both properties were owned by LLCs registered to an address of property management company Good, Philips and Behling.
The buyer of Cambridge Terrace Apartments is an LLC registered to a fund managed by S.F.-based investment company Calvera Partners, while Vue de Lac Apartments was acquired by an entity sharing an address with landlord giant Veritas Investments, county property records show.
Veritas, based across the Bay, is one of San Francisco's largest residential landlords. It was recently the target of intense criticism over a potential 2,100-unit portfolio sale. In January, District 5 Supervisor Dean Preston led a call for the company to delay any sale that would jeopardize the rent control on many of its San Francisco units.
Neither Veritas Investments nor Calvera Partners immediately responded to a request for comment.
"Brandon and I feel strongly that these buyers and others still see the long-term intrinsic value in Oakland," Wagner said. "With these two products specifically, they're kind of middle market in the rental tier, and there continues to be a substantial lack of moderately priced multifamily product."
That product tends to have rents in the range of $1,400 to $1,700, with the downside protection commonly seen in rent-controlled units, according to Geraldo.
Built in 1961, Cambridge Terrace Apartments includes a mix of studios through three-bedroom units, along with a parking garage and a central pool terrace at its 1720 12th Ave. location.
Vue de Lac, which was built in 1906, is two blocks from Lake Merritt and has mostly studios and one-bedrooms. The previous owner had made interior renovations to most of the units over the past decade, according to Colliers.
The deals for both properties come as hopes for Oakland residential properties still run high, but with May rent collection representing an important question mark.
The Oakland portfolio sale, which closed last week, follows SRM Development's $81M sale of Baxter on Broadway, where one-bedrooms start at just over $3K, to a 1031 exchange buyer.
On future multifamily deals in the short-term, Wagner said he doesn't expect prices to need to fall more than 3% to 5%, if at all, for enough buyers to remain interested in Oakland assets.
"We're not blind to the fact that this kind of uncertainty is definitely creating a market that's not as strong as it was in February, when debt was cheap, rents were high, occupancies were high and everything was firing on all cylinders," Wagner said.
"There's still a lot of buyers out there and a tremendous amount of capital on the sidelines, so we don't see prices taking substantial haircuts of more than 10%."