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PGIM Real Estate Enters Bay Area Multifamily Through JV With CityView

Arc Light in San Francisco

PGIM Real Estate has formed a JV with a public pension fund client of CityView to acquire a 50% interest in a portfolio of five Class-A multifamily properties in the San Francisco Bay Area. The portfolio is valued at approximately $500M. 

The portfolio was previously wholly owned by CityView’s client. CityView, a leading investment management and development firm focused on multifamily projects in high-growth areas, will continue to be responsible for managing and leasing the properties for the JV.

Buying and selling of multifamily products has increased within the last two years. In early 2017, Los Angeles-based Decron Properties spent $87M on the 220-unit Bridgecourt apartments in Emeryville. Kennedy Wilson sold its 615-unit Summer House complex in Alameda last year for $231M, marking the largest multifamily transaction of 2017.

Ten-X’s most recent multifamily report said now is a good time to sell multifamily properties in San Francisco, San Jose and Oakland since there is a heavy construction pipeline and vacancy rates are expected to rise through 2020. Sellers have been getting into the game due to a history of rising rents and an ongoing shortage of housing units

“Located in the supply-constrained San Francisco Bay Area within high-barrier submarkets with robust employment drivers, each of these properties is among the best-in-class in terms of location, amenities, interior finishes and architectural design,” PGIM Real Estate Chief Investment Officer, Americas Alfonso Munk said in a statement.

The five multifamily properties in the JV total 745 units. The 94-unit Arc Light in San Francisco is an adaptive reuse of the California Electric Light Co. building and was developed in 2013 and has LEED Gold certification. The 196-unit Potrero Launch in San Francisco was built in 2013 and has LEED Platinum certification. The 143-unit Berkeley Central was built in 2012 and has loft-style floor plans and ground-floor commercial space with fitness and performing arts tenants. 

One Hundred Grand, a 166-unit property in Foster City, was built in 2016 as part of the Pilgrim-Triton master plan. The plan includes three multifamily communities that represented the first multifamily housing delivered in Foster City in 15 years. The 146-unit property in Menlo Park delivered in 2017 and has garden-style construction. 

PGIM Real Estate, acting on behalf of an institutional real estate investor, is the real estate investment business of PGIM, the $1 trillion global investment management businesses of Prudential Financial

PGIM Real Estate Managing Director and Head of West Coast Transactions Tim Hennessey led PGIM Real Estate’s investment in the five-property portfolio.