258-Unit Sale Ranks Tops in Central Valley

BAKERSFIELD, CA-The $25 million sale of the 258-unit Edgewater Apartments here is the largest apartment sale in California’s Central Valley in three years, according to broker Moran & Co. Mike Murphy of the Irvine office of Chicago-based Moran & Co., who represented the seller along with Mary Ann King of Moran’s Irvine office, tells GlobeSt.com: “The property is in a fantastic location surrounded by over 5,000 of the best jobs in the region. Major employers within a five minute drive include Chevron, Aera Energy, State Farm Insurance, Mercy Hospital, and California State University, Bakersfield. State Farm’s recent announcement of the consolidation of their Rohnert Park and Fresno operations into their Bakersfield facility will only add more high-quality jobs to the neighborhood.” Golden State Financial, a private Fresno-based real estate investor, acquired the complex from Chicago’s Equity Residential REIT. Marc Thurston of Grubb & Ellis/ASU & Associates represented the buyer.Murphy observes that the Bakersfield rental market has historically been stable, with average occupancy levels in the 95%-97% range since 2000, and though softening during this economic downturn, has shown a remarkable resilience. “Our survey of the rental market indicates that occupancy levels at comparable properties increased 200-300 basis points in the last 12-18 months, nearly half of which has come in the last six months,” Murphy reports. King adds that investor interest in Edgewater was strong, ultimately attracting more than 20 offers. “Buyers were attracted by the opportunity for cash-on-cash yields superior to most other California markets while still acquiring a high-quality asset in a strong rental market,” she said.Murphy notes that Deanna Randall, president of Golden State Financial, when asked about the Edgewater purchase, responded that it increases Golden State’s presence in the Bakersfield market to own/operate over 1,000 multifamily units. “The timing was key due to low financing rates and a subtle turnaround in the rental market whereby rent growth is beginning to reemerge,” Randall said.The complex, located at 8200 Kroll Way, was built in 1984 and is situated on 15.1 acres along a man-made lake. The apartments are a mix of one- and two-bedroom units ranging from 725 to 1,140 square feet with interior washers and dryers. Select units have fireplaces and vaulted ceilings.