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2/05/14
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LA-based Trion Properties recently acquired Sierra Village, a 185-unit apartment community located in North Highlands, a suburban submarket of Sacramento. The property was purchased for $9.3 mil, or roughly $50k/unit, from a Texas-based seller motivated to sell its west coast assets.
Built in 1986, Sierra Village is located at 5416 Jackson St. It offers tenants a strong amenity package including two pools, two spas, a tennis court, and a fitness center. Sierra Village features a favorable unit mix with 41 one-bedroom units, 72 two-bedroom/one-bath units, and 72 two-bedroom/two-bath units. The occupancy at the time of closing was 93%.
Trion’s plan is to implement a moderate renovation program, which includes new finishes in the unit interiors. The company expects this to enable them to raise rents to market levels while also implementing cost effective and efficient control systems to lower the property’s operating costs. Trion projects an IRR of 20%+ and a strong cash-on-cash return throughout the investment period.
The transaction was brokered by Peter Stevens, Marc Ross and Will Blucher of CBRE, who represented both the buyer and seller. Trion financed the acquisition with senior debt that has a fixed interest rate of 3.25% and a loan-to-value ratio of 80%. The loan was arranged by Mitch Paskover of Continental Funding Group.
This transaction continues the high volume of activity Trion has generated over the past year with six acquisitions and four dispositions.
Commenting on the deal, Trion Properties Managing Principal Max Sharkansky said, “Sierra Village completes our fourth multifamily acquisition in the rebounding Sacramento market and we look forward to having a significant presence in the market. The property is well-positioned to compete against all other properties in the submarket and it will benefit from the area’s improving fundamentals as well as our local expertise.”
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