Q2 2012 Sacramento, California Apartment Property Sales Analysis

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Q2 2012 Sacramento, California Apartment Property Sales Analysis


Investment has picked up. The $217.1 million exchanged in 13 apartment sales during the first half of 2012 exceeded the total for all of 2011 by $19.8 million. The $143.9 million total reported for the second quarter alone stands as the largest single-quarter volume since the third quarter of 2008. The average selling price and mean cap rate for the quarter’s transactions were relatively high at $128,000 per unit and relatively low at 5.3%. The 12-month rolling cap rate per quarter-end was 6.9%, up from 6.7% four quarters prior. In second quarter’s largest sale, the largest in a year, Kennedy Wilson paid Capitol Villas Sacramento LLC $64 million ($156,479 per unit) for the 409-unit Capitol Towers high-rise at 1500 Seventh Street, Sacramento. The sale closed in May at a 5.0% cap rate. The Class B/C property was built in 1961 and renovated in 2007.

Deals since the quarter ended include Bayside Communities’ acquisition of the 220-unit, 85% rented Azure Park Apartments in South Sacramento, the Sacramento Business Journal reported in September. The selling price was not disclosed. The property will be renamed Lotus Landing Apartments. The new owner plans a substantial upgrade. Bayside “was formed to acquire the affordable housing assets of bankrupt A.F. Evans Company. … It now owns or manages 16 apartment complexes in Northern California.”