SAN JOSE — An apartment hub in San Jose’s Willow Glen district has been bought in a deal that runs counter to the pattern of a growing number of instances of weaker values for multifamily residential properties.
Calvera Partners, acting through an affiliate, paid $26 million for an 88-unit complex known as The Glens Apartments at 1514, 1515 and 1533 Alta Glen Dr., according to documents filed on Sept. 4 with the Santa Clara County Recorder’s Office.
The purchase price was 44% above the property’s value of $18 million as of January, according to the Santa Clara County Recorder’s Office.
The residential property was bought for a per-unit price of roughly $295,500.
This per-unit metric was considerably lower than some recent prices paid for apartment properties, including the $370 million purchase of the Park Kiley multifamily residential hub at 355 Kiley Rd. in San Jose in August. That deal worked out to $390,300 a unit and was the largest apartment property transaction in Santa Clara County so far this year by dollar amount.
Calvera Partners, the new owner of The Glens Apartments, is a real estate investment firm that was founded by Brian Chuck, Brian Milovich and David Saxe, real estate executives who came to know each other through their attendance at UC Berkeley’s Haas School of Business. They also were members of the Berkeley Real Estate Club and stayed in touch post-Haas, according to a post on the Calvera website.
San Francisco-based Calvera Partners believes now is a good time to jump into buying apartment buildings despite considerable uncertainties about the market, especially in downtown Oakland.
“We believe that rising interest rates have caused values to decline up to 30% from the peak in early 2022,” Calvera Partners states on its website.
Calvera also believes certain market dynamics could propel apartment values higher.
“We believe that a drop in new apartment construction will create booming demand and higher rents in six to 12 months,” Calvera said.