Rare Downtown Santa Cruz Luxury Multifamily Project Proceeds
Developer Anton DevCo Inc. recently began construction on a newly acquired 1.44-acre property in downtown Santa Cruz that is set to become a 205-unit luxury apartment building funded through the Opportunity Zone program, according to a company statement.
Cushman & Wakefield represented Anton DevCo in the acquisition.
The project represents one of the first new multifamily developments added to the coastal city’s tight housing market in recent years. Only two properties have been added to Santa Cruz’s multifamily stock since 2005, with 70% of the city’s multifamily stock built before 2000, according to data from CoStar Group.
“We’re proud to work with the city of Santa Cruz to bring housing to the downtown district,” Anton DevCo Chief Investment Officer Trisha Malone said in a statement. “More housing is so desperately needed in California, and we’re pleased to be doing our part.”
“The acquisition of this site offered a rare development opportunity along the California Central Coast,” Cushman & Wakefield Northern California Multifamily Advisory Group Executive Director Jason Parr said in a statement. “Santa Cruz offers a desired coastal location proximate to tech communities including Silicon Valley and the Bay Area, and which housing has become increasingly appealing due to the pandemic and the trend for work-from-home. We also anticipate strong apartment rent growth this year.”
Called Anton Pacific, the project runs along Pacific Avenue and Laurel Street and is about a half-mile from the Santa Cruz Beach Boardwalk. In addition to 48 studio units, 98 one-bedrooms and 59 two-bedrooms, the project will offer 11K SF of ground-floor retail and a two-level parking structure.
Building amenities include a spa, a fitness center and a rooftop deck featuring an indoor lounge, fire pits and Pacific Ocean views.
“We’re excited to become a part of this community and build something downtown can be proud of,” Anton DevCo Director of Investments Marco Scola said in a statement. “In a world where working from home is growing in prevalence, where better to call home than walking distance to the beach in downtown Santa Cruz?”
Before the pandemic, there was a trend of tech workers choosing to live in Santa Cruz and companies setting up offices downtown, according to Cushman & Wakefield’s brokerage team. Some tech companies have also offered shuttle service between Santa Cruz and Silicon Valley offices.
Post-pandemic with the rise of the remote working model, Cushman & Wakefield brokers expect Santa Cruz to continue experiencing growth from the tech sector with companies increasingly offering hybrid working models that allow employees to make fewer trips to their Silicon Valley offices.
CoStar's forecasting projects strong year-over-year market-rate rent growth in Santa Cruz that is expected to peak at 6.3% in Q3 2021, followed by annual rent growth stabilization at about 3% through 2024.
“Anton Pacific exemplifies Anton’s optimism in developing such a significant project during the pandemic and as the company helps fill demand for housing on the coast,” Cushman & Wakefield Northern California Multifamily Advisory Group Director Scott MacDonald said in a statement.
Built by Anton DevCo affiliate general contractor Anton Building Co., the project is expected to be complete in 2023.