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Palo Alto-Based Essex Property Trust Expands Its Local Portfolio With $101M Multifamily Transaction

Two investors sold a Mountain View multifamily complex at 1030 Castro St. as the Silicon Valley apartment market continues to perform well.

Affiliates of Los Angeles-based Cityview and Charleston, South Carolina-based Greystar Properties sold the 164-unit complex to Palo Alto-based REIT Essex Property Trust for $101M, the San Francisco Business Times reports. 

Essex Property Trust bought this 164-unit apartment complex for $101M.

“Strong rental demand in Mountain View provided a desirable disposition environment to drive pricing,” a spokesperson for Cityview told Bisnow via email. 

Essex declined to comment and has rebranded 1030 Castro St. as Arlo Mountain View.

Essex forked over more than $616K per door in the all-cash transaction, about 21% below the property’s assessed value in early 2023, according to The Real Deal.

The asset contains studio, one-, two- and three-bedroom units, along with private balconies and patios, a fitness center, a club room and a business center. Studio rents start at $3.6K per month, and three-bedrooms top off at about $6.2K per month. 

Despite the price decline, Arlo’s per-unit value far exceeds the average price for apartments in metro San Jose and across the U.S. A March Yardi Matrix report pegged the average apartment price in 2023 at $366K per unit, nearly double the $185.5K national average.

Meanwhile, “lifestyle assets,” or those properties with higher-quality amenities, fetched much higher prices, $433K per door on average.  

New developments, especially along transit corridors, have soared in popularity among renters in the Bay Area.

“Developers have continued to capitalize on the appeal of mixed-use transit-oriented projects, where easy commutes and complementary retail and restaurant uses deliver an attractive lifestyle for residents,” NAI NorCal wrote in a March report.