PETALUMA -- A 492-unit south Petaluma apartment complex, one of the largest in Sonoma County, sold for $68 million to a Southern California institutional investor, 15 months after it was purchased for $52 million.
KW G&I VI Petaluma LP acquired Enclave at Adobe Creek from AMFP QVT Enclave LLC. The sale of the complex, located at 1 Lakeville Circle and formerly called Lakeville Resort Apartments, was recorded Monday.
The off-market property was 97 percent occupied.
“As the multifamily sector stages a strong recovery, pricing will continue to increase, particularly in prime locations,” said Phil Saglimbeni, one of the brokers for the sellers.
KW G&I VI Petaluma LP is made up of Beverly Hills-based Kennedy Wilson Holdings Inc.'s Kennedy Wilson Property Fund III and DRA Growth & Income Fund VI, an affiliate of New York-based DRA Advisors LLC.
Among about a couple dozen other multifamily properties publicly owned Kennedy Wilson (NYSE: KW) manages are two North Bay properties, the 260-unit Bay Village Apartments in Vallejo and 66-unit Rutherford Townhomes in Napa.
AMFP QVT purchased Lakeville Resort Apartments in October 2009. The investment fund is led by New York-based multifamily advisor Abacus Capital Group and Los Angeles-based real estate private equity fund QVT Mount Auburn Capital LP.
Abacus Executive Vice President Greg Lyden said the investment was part of the company "value-add" strategy for its institutional investors.
"Abacus recognized that the property could be repositioned both physically and operationally to garner a greater share of the higher end of the market," Mr. Lyden said.
Higher rents and better collections have lifted property revenue in January nearly 17 percent higher than it was in October 2009, according to Mr. Lyden.
Upon purchasing the property, the partnership immediately invested $2 million into resolving deferred maintenance, undertaking capital-improvement projects and rebranding the property. The projects included a renovated clubhouse and certain unit interiors. The new clubhouse included an upgraded fitness center, resident lounge, business center and a resort-style pool area with gas grills. The renovation also included a new tennis court and the introduction of a trash compactor to the property along with more energy-efficient laundry.
Stan Jones and Phil Saglimbeni of Institutional Property Advisors represented AMFP QVT in the sale, and the brokerage represented it in the original purchase.
CORRECTION, Feb. 15, 2011: The buyer was KW G&I VI Petaluma LP, made up of Kennedy-Wilson and an affiliate of DRA Advisors LLC, according to Kurt Zech of Kennedy Wilson Multifamily in San Francisco. Public records incorrectly listed KW G&I Fund IV Petaluma LP and DRA G&I Fund IV Kennedy-Wilson Holdings Inc. as buyers. DRA Growth & Income Fund IV is closed. The provided property income figure was incorrect.