Trion Properties, a private equity real estate firm with a niche focus on value-add multifamily investments, has acquired an 88-unit multifamily property in Fremont, California for $26.5 million.
This is the firm’s fifth Bay Area acquisition in less than two years, bringing its portfolio in the area to 350 units, according to Max Sharkansky, Managing Partner at Trion Properties.
“Fremont is centrally located in the East Bay and the northern part of Silicon Valley, a region that is experiencing tremendous growth,” says Sharkansky. “The market benefits from the expansion of the technology sector as companies are moving across the Bay into this submarket.”
The apartment community is located less than five miles from Fremont’s Tesla factory, one of the most technologically-advanced automotive factories in the world, which currently employs over 6,000 people and takes up 5.3 million square feet, notes Sharkansky.
“The Fremont City Council recently approved a 4.6 million square-foot expansion of the Tesla factory, which is predicted to bring 3,100 new workers to the area and further drive demand for quality housing in this submarket,” continues Sharkansky. “We have been extremely bullish in the East Bay market for the past two years, most recently acquiring a 146-unit multifamily property in San Leandro in April. We continue to see deep value throughout the region and plan to further expand our portfolio throughout the East Bay.”
Sharkansky also notes that the extension of the BART, planned to be completed next year, will more effectively connect the East Bay and Silicon Valley, further driving demand for multifamily housing in the area.
“This asset was a rare find, as it was well-maintained for its vintage while presenting huge upside potential,” says Sharkansky, who notes that the property was owned by the same family since its construction in 1966. “Our previous experience in the area and our vertically-integrated property management platform will allow us to reposition this apartment community into a competitive complex that will improve our residents’ quality of life and result in favorable returns.”
Trion will strategically renovate the apartment community to stabilize the asset and increase net operating income. The firm will also rebrand the property, currently known as Americana Apartments, as Parc 88.
After upgrades, the units will cost approximately $900-$1000 less than new construction units per month, making it attractive to the workforce moving to the area, and resulting in strong occupancy and stabilized cash flow, notes Sharkansky.
The firm plans to modernize the property through a series of interior and exterior upgrades. Interior renovations will includ e the installation of faux wood plank flooring, quartz countertops, updated cabinetry, and washer/dryer appliances in each unit. Exterior renovations includ e updating the apartment’s signage and investing in landscaping the asset’s 4.4 acres of greenspace.
Continental Partners arranged a $19.75 million bridge loan for this acquisition and $10.75 million of joint venture equity for the asset.
The apartment community is located at 4445 Stevenson Blvd in Fremont, California. Shivu Srinivasan of NAI Capital represented Trion Properties as the buyer and Victor Makras of Makras Real Estate represented the seller, the Jones Family, in this transaction.
About Trion Properties
Founded in 2005 and headquartered in Los Angeles, Trion Properties is a private equity investment firm that primarily acquires opportunistic real estate properties with an emphasis on multifamily. Trion’s value-add portfolio spans the west coast and encompasses more than $230 million in assets which have generated an average internal rate of return in excess of 30 percent. With its fully built-out operator platform, Trion has repositioned and stabilized undervalued assets, leveraging its expertise in real estate finance and renovation of multifamily properties to drive returns for its investors.
Since its inception, Trion has acquired the fee interest—or in certain instances the debt secured by the fee interest—of over 1,500 multifamily units. To date, Trion has successfully repositioned and resold over 795 units totaling over 50,000 square feet of commercial real estate space.
Over the last three years, Trion’s affiliated entities have acquired 38 properties and/or non-performing loans. Trion has successfully completed its transaction cycle—acquisition, obtaining the title and control of the asset, implementation of value-add procedures, and disposition—on 22 of those acquisitions.
The principals of Trion Properties are Max Sharkansky and Mitch Paskover, two real estate professionals with over 30 years of combined experience in finance, acquisitions, management and redevelopment. Additional information is available at http://www.trion-properties.com/