MG Properties Makes Big Investment In South Bay Apartments As Rents Climb
San Diego-based multifamily owner MG Properties significantly expanded its holdings in the South Bay area this week, picking up more than 800 units across two properties, one of which it purchased in conjunction with Oaktree Capital Management.
MG and Oaktree purchased the 551-unit Platform Urban Apartments in San Jose. The transit-oriented community includes 35K SF of ground-floor retail.
On its own, MG Properties purchased the Eleanor Apartments, a 333-unit community located in Milpitas, California, for $193M. MG purchased the Eleanor from a joint venture consisting of SummerHill Apartment Communities, The Resmark Cos. and Kennedy Wilson.
"We believe the Bay Area is poised for a recovery and is well-priced in comparison to other markets," MG Properties President Jeff Gleiberman said in a press release. "The Bay Area market is seeing explosive employment growth which we expect to drive multifamily demand."
It has been a busy week for multifamily acquisitions in the South Bay.
In addition to MG's deals, affiliates of Klingbeil Capital Management purchased a 116-unit property called the Via Reggio Apartments in San Jose for $53.3M, according to SiliconValley.com. The buyer used a $25.5M loan from PNC Bank for the acquisition.
Transwestern’s Q2 2022 report on the Bay Area multifamily market noted year-over-year rent growth of 16.8% for the San Jose-area market — a 0.7% increase from the same period in 2020.
The city’s multifamily vacancy rate also decreased from 5.3% in Q2 2021 to 3.1% for Q2 of this year. Effective monthly rent rose from $2,549 to $2,978 during that same period.