Calvera Partners Buys More Sunnyvale Apartments, Plans Major Upgrade
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Calvera Partners has taken another bite of Sunnyvale, acquiring a 37-unit apartment building that the San Francisco-based company intends to renovate.
It’s the second Sunnyvale pickup and the fifth overall in Silicon Valley for Calvera, which was formed in 2010 by a team of industry veterans.
Calvera picked up the building at 1090 Sunnvyvale-Saratoga Road called Crestview for an undisclosed sum with financing from JP Morgan Chase, the company said in a news release. Built in 1960, the property is in good condition but will undergo a transformation to keep it competitive in the marketplace. Martinkovic Milford Architects of San Francisco is doing the design.
Investors have been keen on vintage Silicon Valley apartment buildings, which dominate the market despite a flood of new Class A units being built. The play allows owners to achieve higher rents and better compete with the new product. RealFacts says Sunnyvale experienced year-over-year rent growth of 7.8 percent and a vacancy rate of 4.5 percent through the third quarter of 2013.
“Older buildings definitely need to upgrade in order to compete or they’ll become functionally obsolete,” said David Saxe, a managing principal at Calvera, in an email. “While the new Class A buildings attract a different renter than older properties, through smart renovations we’ve been able to achieve much higher rents than our competition while still providing tremendous value compared to the newer Class A properties.”
Despite the increased competition for value-add apartment properties, Saxe said Calvera is still keen on the market.
“There are opportunities for value-added investments in Silicon Valley, but we’ve been careful not to price in too aggressive rent growth,” he said. “We believe in Sunnyvale and the greater Bay Area long-term and hope to find additional opportunities like (this one).”
Calvera’s renovations include new laminate flooring, upgraded fixtures and finishes, granite countertops and accent wall paint, as well as exterior improvements such as new dual-pane windows and improved landscaping.
http://www.bizjournals.com/sanjose/news/2014/01/10/calvera-partners-buys-more-sunnyvale.html
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