SAN JOSE — A big San Jose apartment complex with affordable income-restricted units has been bought for $60 million-plus in a deal that hints at wobbly values for the multifamily residential market in the Bay Area.
Orchard Glen, a residential hub at 3975 Seven Trees Boulevard in south San Jose, has been bought for $61.1 million, according to documents filed on June 23 with the Santa Clara County Recorder’s Office.
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Post Glen Group, a Los Angeles-based real estate firm, heads up an entity that bought the apartment complex, the county records show. The buying group includes a nonprofit called Affordable Housing Access.
Orchard Glen consists of 288 units in a series of two-story buildings and was built in 1978, according to the Apartments.com website.
The apartment complex is located near the intersection of Monterey Road and Capitol Expressway in a primarily residential area.
CBRE Capital Markets provided the buying group with financing for the purchase, the county records show. The loan was transferred to the Federal Home Loan Mortgage Corp., also known as Freddie Mac.
The purchase price suggests slightly weaker values for apartment properties in this section of the Bay Area.
Why? The estimated value for the apartment complex was $63.9 million in January 2024, according to the Santa Clara County Assessor’s Office.
This indicates that the purchase price was 4.4% below the assessed value for the Orchard Glen apartments.
The effects of slumping property values extend beyond the owners of real estate. Property value trends can imperil revenue for an array of public agencies.
If real estate values turn soft in a region, the decline could impede a crucial revenue stream for cities, counties, regional agencies and school districts.
Orchard Glen owners and managers have placed income restrictions on numerous units in the complex, according to the property’s website.
“This property participates in the federal affordable housing program called Low Income Housing Tax Credit, also known as Section 42,” Orchard Glen states on its website.
For a household of four, the annual income limit is $119,540 to rent a unit in Orchard Glen, the apartment community’s website states.
“Applicants and residents must be income-eligible to move in and will be required to complete recertification paperwork annually,” Orchard Glen states on its website.
By comparison, the area median income for Santa Clara County is $195,200, according to the state Housing and Community Development Department.
This suggests that the income limits at Orchard Glen are roughly 39% below the area median income for the South Bay.
“The low-income housing tax credit program strives to increase housing access and affordability and to expand the availability of quality community services for the people of California,” according to the Orchard Glen website.