Revamp, Flip of Sunnyvale Apartments Brings Investor 45% Profit
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A 37-unit apartment building in Sunnyvale has sold for $15.7 million — netting the seller a tidy profit for a building it bought just over three years ago and revamped.
Calvera Partners said it sold the property at 1090 Saratoga Road at an 89 percent price increase over the $8.325 million it paid for the complex in January 2014. It didn’t disclose the buyer in the deal, which worked out to $424,000 per unit.
The company also put $2.5 million into a major renovation of the building, a 1960s-era apartment complex formerly known as Crestview Terrace. Including the renovation costs, Calvera’s profit works out to about 45 percent.
That puts the flip right in line with how Calvera describes its typical business strategy: Buy up aging apartment complexes, renovate them and sell them for a profit. The company said it’s sold five properties for an estimated average internal rate of return of 41.8 percent.
Calvera said it typically renovates properties “using inspiration from the boutique hotel industry.” Among the upgrades the apartments received are remodeled kitchens and bathrooms, new flooring and new LED lighting fixtures and electrical work. The complex also has a revamped pool area with outdoor art, bicycle storage, a dog-friendly courtyard and a Wi-Fi equipped tenant lounge.
“This community underwent the most significant physical change of any property we’ve owned,” David Saxe, managing principal at San Francisco-based Calvera Partners, said in a statement. “It was in disrepair when we took ownership and needed a major renovation and image upgrade. We spent more than $2.5 million renovating the property both inside and out to create a community that is modern, interesting, and functional for today’s renter.”
With its new look, the complex also got a new name — pksl (pronounced “pixel”) — and is themed around Atari, the Sunnyvale-based computing and video game company that helped to spawn Silicon Valley’s tech industry.
“Our vision sets our properties apart from our peers and establishes cachet rivaling new apartments,” Saxe said in a statement. “As much as we’d love to hold the property forever, we received an offer that fully recognizes the work we put into the building and this sale will generate a substantial return for our investors in less time than anticipated.”
https://www.bizjournals.com/sanjose/news/2017/08/15/revamp-flip-of-sunnyvale-apartments-brings.html
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