221 Marin County apartments change hands in $188 million of deals

A large national apartment property investor and a Napa-based commercial property developer have purchased 221 Marin County multifamily units amid a rebound in rents and occupancy in outlying markets of the San Francisco Bay Area.

An affiliate of Bell Partners Inc. on Dec. 2 purchased the Tam Ridge Residences property at 195-205 Tamal Vista Blvd. in Corte Madera for a recorded price of $156 million, according to an announcement and public documents. That equates to nearly $867,000 a door.

Renamed Bell Mt. Tam, it was the Greensboro, North Carolina-based company’s second North Bay acquisition this year and its third in California, among $4.8 billion in deals the firm said it has completed so far in 2021. Bell Mt. Tam reportedly was 92% occupied at the time of sale.

And on Nov. 16, an affiliate of Napa’s Channel Properties acquired the recently finished 815 B St. project at the northwest corner of Second and B streets in downtown San Rafael at a recorded value of $32.1 million, according to the deal brokers and county records. That price works out to $783,600 a unit.

Completed in June, three-quarters of the 815 B St. apartments were occupied at the time of sale, but the nearly 2,000 square feet of street-level retail space remains vacant, according to Newmark. Rents range from $3,100–$3,900 a month for single-bedroom flats, with an average of $3,500, Two-bedroom units rent for average of $4,500, with a range of $4,100 up to $5,000 for the penthouse suites.

"They paid a pretty strong price for the property and assumed some lease-up risk,“ Jay Cross, part of the Newmark brokerage team on the 815 B St. deal, told the Business Journal. ”It is notable that they just started leasing in June and did really well obtaining pretty high rents, even during challenges of leasing through (the) COVID (pandemic). It speaks to the strength of the tenant market.“

This past spring as vaccines were just rolling out and pandemic restrictions were loosening further, apartment property owners in much of the Bay Area were offering concessions to fill units, Cross said.

“Downtown San Francisco was the hardest hit area of the country, with some owners offering two to four months of concessions, and that had an effect on the lease-up of properties at the higher end in Marin and elsewhere,” he said. “San Francisco has not fully recovered, but Marin and other areas in the North Bay have. The farther a market is away from San Francisco and the more appealing it is as a place that is not so dense, it has recovered quickly, and in some cases exceeded pre-COVID levels.”

Despite a significant cooldown, national apartment rent growth is still outpacing its pre-pandemic trend, according to real estate information service CoStar. But Marin’s occupancy rate had rebounded to 97% by December, and the lack of significant anticipated new construction of multifamily properties is solidifying the long-term outlook for occupancy in the Bay Area to remain above 95% for the next several years, according to CoStar.

Bell’s Nickolay Bochilo, executive vice president of investments, noted the Corte Madera property’s “highly desirable location in a supply constrained area and modern apartment finishes.“ The property is about a half-mile from the upscale open-air shopping center Village at Corte Madera.

"The acquisition of Bell Mt. Tam reflects our focus on finding investments that offer compelling long-term fundamentals and opportunities to enhance and protect value via our operating platform,” Bochilo said in the news release.

BCF I Tam Ridge LP acquired the Corte Madera complex from 195-205 Tamal Vista Boulevard LLC, an affiliate of the project developer, San Francisco’s Macfarlane Partners Investment Management LLC, according to county records. Construction was completed in 2017.

The property has six buildings with one-, two- and three-bedroom units and a half-acre park. It also has 3,100 square feet of retail space, anchored by an Andy’s Market grocery store.

With about 70,000 units under management, Bell claims to be one of the largest apartment operators and renovators in the U.S. In February, an affiliate acquired the 232-unit Windsor at Redwood Creek complex in Rohnert Park.

815 B St. developers Monahan-Parker and Monahan-Pacific first submitted its proposal for the project in 2013.

Also brokering the San Rafael deal were Newmark’s Haden Ongaro, Mark Leary and Rob Ledoux for seller 1200 Second Street Investors Inc., an affiliate of Monahan-Parker, and seller Harvest Park Inc., an affiliate of Channel Properties.

A real estate investment venture of the owners of Channel Lumber, a major East Bay-based wholesaler, Channel Properties developed The Riverfront, a landmark downtown Napa housing, office and retail project along the Napa River that opened in 2008. The real estate company currently is working at a south Napa site to build a 100,000-plus-square-foot warehouse and an adjacent one with 20,000 square feet.

Jeff Quackenbush covers wine, construction and real estate. Before the Business Journal, he wrote for Bay City News Service in San Francisco. He has a degree from Walla Walla University. Reach him at jquackenbush@busjrnl.com or 707-521-4256.

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Correction, Dec. 14, 2021: The recorded value of 815 B St. was $32.1 million, not $31.1 million, because of a miscalculation of the documentary transfer tax.