OAKLAND — Eight apartment buildings in Oakland have been bought for more than $60 million in a deal that suggests values for multifamily residential properties in the East Bay’s largest city are plunging.
The Oakland apartment buildings involved in the deal were bought for a combined $62.8 million and are all located in the vicinity of Lake Merritt and Interstate 580, documents filed on April 29 with the Alameda County Recorder’s Office show.
Apartment complex at 257 Vernon Street in Oakland. (Google Maps)
The deal also shows that apartment values in Oakland continue to drift lower as more multifamily residential properties are haunted by falling prices, loan defaults and even foreclosures.
Together, the eight apartment complexes offer a combined 337 rental units. One complex is as small as five units, while another contains 88 residences, according to the Apartments.com and RentCafe websites.
PCCP, also known as Pacific Coast Capital Partners, a nationwide real estate investment firm, acted through affiliates to buy the eight apartment complexes.
The sellers were affiliates that were all controlled by Yat-Pang Au, an entrepreneur who is chief executive officer of Veritas Investments, a real estate firm that he founded.
At one point, Veritas was San Francisco’s largest apartment landlord — until a massive loan default and foreclosure torpedoed the company’s ownership of 60 apartment complexes with 2,149 units.
Ballast Investments wound up with the San Francisco residential properties through its purchase of a delinquent $940 million loan portfolio that was secured by the 2,149 apartment units.
Here are some of the details of the apartment purchases in Oakland, according to Alameda County documents and commercial property databases:
— 257 Vernon St., an 88-unit complex in the Adams Point neighborhood, was bought for $17.5 million.
— 1600 Third Ave., a 75-unit property known as the Vue de Lac apartments. Located two blocks from Lake Merritt, the complex was bought for $10.7 million.
— 888 Vermont St., a 44-unit apartment complex, had an $8.1 million purchase price.
— 630 Mariposa Ave., a 36-unit apartment building, was purchased for $6.9 million.
— 345 Macarthur Blvd., a 36-unit apartment property, was bought for $6.7 million.
— 100 Monte Cresta Ave., a 31-unit apartment complex, brought a $6 million purchase price.
— 226 and 230 Orange St., an 11-unit building, was bought for $3.6 million.
— 355 Staten Ave., a 16-unit property, was bought for $3.3 million.
The combined price of $62.8 million was a jaw-dropping 40.1% below the total assessed value of the eight apartment properties.
As of January 2024, the total value of the apartment buildings was $104.8 million, according to estimates posted by the Alameda County Assessor’s Office.
Taken separately, the individual apartment properties were also bought at prices far below their respective assessed values.
Jolts caused by slumping property values extend well beyond a survey of the local real estate economy. Property value trends can imperil revenue for an array of public agencies.
If real estate values turn soft in a jurisdiction, that could squeeze a crucial revenue stream for cities, counties, regional agencies and school districts.
