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Berkadia®, a joint venture of Berkshire Hathaway and Jefferies Financial Group, is an industry leading commercial real estate company providing comprehensive capital solutions and investment sales advisory and research services for multifamily and commercial properties. Berkadia® is amongst the largest, highest rated and most respected primary, master and special servicers in the industry. This advertisement is not intended to solicit commercial mortgage company business in Nevada.
© 2024 Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Berkadia® and Berkadia Commercial Mortgage® are trademarks of Berkadia Commercial Mortgage LLC. Investment sales and real estate brokerage businesses are conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Tax credit syndication business is conducted exclusively by Berkadia Affordable Tax Credit Solutions. For state licensing details for the above entities, visit www.berkadia.com/licensing.
CONTACT Us
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INVESTMENT SALES
MORTGAGE BANKING
Jason Parr
Senior Managing Director
415 407 2106
jason.parr@berkadia.com
CA DRE #01323188
SCOTT MACDONALD
Managing Director
415 310 0487 scott.macdonald@berkadia.com CA DRE # 01422005
John Hansen
Director
415 342 5772 john.hansen@berkadia.com CA DRE #02078357
Brayden Joel
Financial Analyst
503 933 9284
brayden.joel@berkadia.com
CA DRE #02204506
Sydney Ladrech
Senior Financial Analyst
916 677 6633
sydney.ladrech@berkadia.com CA DRE #02126658
Clay Akiwenzie
Managing Director
775 447 0595
clay.akiwenzie@berkadia.com
CA DRE #01908942
Hank Workman
Associate Director
415 646 7713
hank.workman@berkadia.com
CA DRE #02099264
KAOHU BERG-HEE
Senior Director 808 754 0033 kberghee@berkadia.com CA DRE #01986886
BRETT BETZLER
Senior Managing Director 949 981 1196 brett.betzler@berkadia.com CA DRE #01330214
Operational Momentum & Fundamentals Deliver Upside
A Rare & Differentiated Garden-Style Community
Durable Employment Base Drives Robust Demographics
Upscale Suburban Living Surrounded by Expanding Urban Offerings
INVESTMENT HIGHLIGHTS
The Strand has generated 6.3% effective rent increases on renewals in the past 90 days illustrating strong tenant demand for the Property’s unique combination of spacious modern residences, robust amenity package, expansive grounds, serene suburban setting, and direct access to the urban core.
Average market rents in the Property’s submarket are forecasted to grow more than 18% over the next five years and maintain 95% average occupancy while West Sacramento’s average household incomes expand by a projected 15% to over $120k annually.
With no multifamily communities under construction in the submarket, a fading development pipeline across the greater market, and 5% population growth expected in West Sacramento by 2028, The Strand is positioned to continue to capitalize on robust apartment fundamentals while remaining insulated from future competition.
Sacramento’s garden-style communities have dramatically outperformed mid-rise product over the past five years with ±70% less vacancy and ±50% lower concessions.
Despite the clear preference towards garden-style product amongst the market’s renters, mid-rise communities make up 80% of the units recently delivered or presently under construction in the West Sacramento, Natomas, Downtown, and Midtown submarkets.
As a luxurious low-density community with large floorplans, a full suite of amenities, and ample parking, The Strand stands alone in the marketplace and embodies what renters want, while providing a 50% shorter commute Downtown when compared to new construction properties in Natomas.
The Strand is the most luxurious low-density rental community immediately adjacent to Sacramento’s Urban Core, delivering a peaceful suburban lifestyle with immediate access to highly-coveted Bridge District offerings including Sutter Health Park, Drake's Barn, & River Walk Park at a ±20% rent per square foot discount to comparable properties in Downtown Sacramento.
The replacement of the I Street Bridge will provide the Property’s residents enhanced connectivity to the MSA’s most transformative redevelopments located in The Railyards, River District, and Township Nine – providing a combined seven million square feet of innovative office space, over 650K square feet of retail, a multitude of restaurant options, a concert venue, museum, and more – which is expected to double the size of the urban core over the next several years.
In addition to the pivotal developments on the horizon, The Strand supplies residents with immediate entry to the coveted Downtown Commons, a vibrant mixed-use development home to over 630K square feet of retail shopping, dining and entertainment space – with 200 events, games, and concerts per year at the Golden 1 Center.
Sacramento has benefitted from 2.3% year-over-year job growth and is highly regarded as one of the nation’s most recession-proof economies with 33% of residents employed in healthcare, social services, public administration, and education.
Strategically located adjacent to the MSA’s largest concentration of employment, The Strand’s residents are within a short commute of ±120,000 jobs and ±40MM square feet of office space in Downtown Sacramento, Natomas, and West Sacramento.
The Strand’s tenant base has an average annual household income of ±$120k and earns ±15% more than the average household in West Sacramento with UC Davis, UC Davis Health, the State of California, Sutter Health, and Dignity Health employing the greatest number of tenants.
The Opportunity
Berkadia is pleased to exclusively present the opportunity to acquire The Strand (or the “Property”), a new 408-unit garden-style community that distinctively combines modern suburban conveniences with the growing amenities of Sacramento’s immediately adjacent and thriving urban core. The Property’s unique value proposition in the “#1 Place to Live in California” has successfully attracted affluent renters that earn an average household income of ±$120,000 annually and is generating 6.3% effective rent increases on T-90 renewals. This proven operational momentum, combined with projected local 5% population-, 15% income-, and 18% rent-growth over the next five years, make The Strand a compelling and differentiated investment that is offered at a ±20% discount to replacement cost.
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THE HIGHLANDS
Named the #1 Place to Live in California by Forbes Magazine in 2024, the Sacramento MSA is one of the most sought-after housing markets on the West Coast. Currently comprised of over 2.4 million residents, the population is forecasted to grow 4.3% over the next five years, with more than 23% of those residents in the key renter age group. Families and young professionals have flocked to the area making Sacramento the #2 metro across the nation for homebuyers considering relocation according to Redfin. According to the US Bureau of Labor Statistics, as of June 2024 Sacramento employers increased their employee count by 2.2% year-over-year to nearly 1.1 million. In addition to agriculture, the region is also home to top tech employers including Apple, Amazon, IBM, Intel, and EA Sports. In 2023, LinkedIn ranked Sacramento 3rd in the nation for inflow of tech workers. Residents are well-connected throughout the region and benefit from a diverse transit network including Interstates 5 and 80, Highways 50 and 99, and the metro’s extensive rail system. Amtrak provides additional connectivity with routes to the San Francisco Bay Area, Central Valley, and Central Coast. Overall, the Sacramento MSA offers residents a compelling housing value proposition relative to the Bay Area without sacrificing high-paying employment opportunities, excellent regional transit, and a vast array of recreational and lifestyle offerings.
Sacramento MSA Overview
LOCATION
To be determined by market To be determined Free & clear of existing financing 500 Douglas St., West Sacramento, CA 95605 Yolo 2022 17.02 741,391 408 ±885 ±361,080 $2,361 $2.67 92.4%
Price Bid Deadline Terms of Sale Address County Year Completed Site Size Acres Site Size Square Feet Total Residential Units Average Unit SF Net Rentable Square Feet Average In-Place Rent Average In-Place Rent/SF Occupancy
INVESTMENT SUMMARY
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MATT MCCRUM
Senior Financial Analyst 415 272 2924 matt.mccrum@berkadia.com CA DRE #02143464
© 2024 Berkadia Proprietary Holding LLC
Berkadia® is a trademark of Berkadia Proprietary Holding LLC
Investment sales / real estate brokerage business is conducted exclusively by Berkadia Real Estate Advisors LLC and Berkadia Real Estate Advisors Inc. Commercial mortgage loan origination and servicing businesses are conducted exclusively by Berkadia Commercial Mortgage LLC and Berkadia Commercial Mortgage Inc. Tax credit syndication business is conducted exclusively by Berkadia Affordable Tax Credit Solutions. This website is not intended to solicit commercial mortgage company business in Nevada.
In California, Berkadia Real Estate Advisors Inc. conducts business under CA Real Estate Broker Lic. #01931050, Berkadia Commercial Mortgage LLC under CA Finance Lender & Broker Lic. #988-0701, Berkadia Commercial Mortgage Inc. under CA Real Estate Broker Lic. #01874116. For state licensing details for the above entities, visit www.berkadia.com/licensing.
