SAN JOSE — Two big apartment complexes in the South Bay have been bought by groups led by a California investor on the same day for more than a half-billion dollars, deals that hint at a healthy regional housing sector.
The Platform Urban Apartments in San Jose and Eleanor Apartments in Milpitas, have been purchased for a combined $513 million, Santa Clara County property documents show.
The 551-unit Platform Urban complex was bought for $320 million by a joint venture led by MG Properties and Oaktree Capital Management, documents filed on July 28 with the county show. The property is at 1501 Berryessa Road in San Jose. Eastdil Secured, a commercial real estate firm, brokered the deal.
The 333-unit Eleanor Apartments was bought for $193 million by MG Properties on the same day, according to the property records. The Eleanor complex is at 312 Gates Drive in Milpitas. Institutional Property Advisors, a division of Marcus & Millichap, arranged the transaction.
Both apartment projects are within two or three blocks of BART stations, Berryessa Station and Milpitas Station, respectively.
San Diego-based MG Properties and Los Angeles-based Oaktree Capital obtained a $245 million loan from TPG RE Finance at the time of its purchase of the San Jose apartment complex, the property documents show. To assist in its acquisition of the Milpitas apartments, MG Properties landed financing from Fannie Mae.
“We believe the Bay Area is poised for a recovery and is well priced in comparison to other markets,” said Jeff Gleiberman, president of MG Properties, in comments associated with the purchase of The Platform Urban Apartments in San Jose.
The Platform complex also features 35,000 square feet of ground-floor retail. The project was completed in 2019 and is near the tech hubs in north San Jose. Eleanor Apartments has 20,000 square feet of retail and was completed in 2021.
“This transit-oriented, luxury community asset will strongly benefit from the Bay Area’s continued economic recovery from the pandemic,” Jared Lazarus, managing director with Oaktree Capital’s real estate unit, said of the San Jose apartment complex.
It appears that Western National Properties, the Irvine-based seller of the Platform Urban complex in San Jose, harvested a profit from the $320 million deal. In June 2022, the complex had an assessed value of $269.1 million.
Similarly, it appears that SummerHill Apartment Communities, The Resmark Cos. and Kennedy Wilson, the sellers of the Milpitas apartment complex, also captured a profit. Eleanor Apartments had an assessed value of $167.6 million in June of this year.
MG Properties believes its purchase of the Eleanor Apartments in Milpitas is an investment play that could benefit from a future upswing in the Bay Area job market, which has turned somewhat wobbly so far in 2022.
“We are pleased to be further growing our long-term presence in the Bay Area, a market that has strong potential for recovery after the impacts of the COVID crisis,” Gleiberman said.
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