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9/25/24
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Rumble Road Apartments, a newly constructed 50-unit multifamily community in Modesto, CA, traded hands for $17 mil, or $340k per unit. The property, located at 2531 West Rumble Rd, was acquired by Aspen Real Estate Financial LLC (AREF) in partnership with Stanislaus Regional Housing Authority and CalAHA.
Rumble Road Apartments consists of 10 one-bedroom units averaging 726 sf and 40 two-bedroom units averaging 889 sf. Each unit includes air conditioning, ceiling fans, stainless steel appliances, double pane windows, walk-in closets, full-size washers/dryers and tankless water heaters. Community amenities include a clubhouse with fitness center, play area, and onsite property manager. AREF has provided the funds to gate the entire community.
Stanislaus Regional Housing Authority, on a 35-year lease to own the property, will begin implementing a workforce housing platform at the property, in which the rent levels will be structured to fall within moderate income housing as defined by HUD -- at 80% to 120% of AMI.
One-bedroom rents are structured at 83% of comps ($2,150 / month with a savings of $364 /month). Two bedroom rents are structured at 87% of comps ($2,380 / month with a savings of $310 / month).
Housing Authorities along with their city or school district partners do not have to provide funds for this program. AREF handles 100% of the total capitalization of the acquisition, along with significant reserves to cover lease payments and operating expenses. This program is a long-term lease to own, where AREF donates all the equity and upside value to the Housing Authority. Additionally, the housing authority gets 100% of the cash flow from the property.
Matt Benwitt of Lee & Associates LA North/Ventura represented the buyer in the transaction and is the exclusive broker for AREF. The seller was repped by Marcus & Millichap. Nick Benjamin and Tom Lewis of CalAHA, CEO and legal counsel respectively, participated in the lease to own structure for their Stanislaus Regional Housing Authority Member.
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