Granite Capital Group, (GCG), a Santa Barbara real estate investment firm with real estate holdings in Colorado, Montana, Texas and California, has completed a $58 million purchase of The Boulders Apartments, a 164-unit multifamily community in Walnut Creek, California.
The transaction was brokered by the northern California team of Institutional Property Advisors. Escrow closed Nov. 6.
Proceeds from the sale of GCG’s Enclave Belle Creek apartments in Denver, Colorado, were used in The Boulders purchase using a 1031 Tax Deferred Exchange. The 16-building complex includes a fitness center, two pools and a clubhouse.
“We evaluated over 2,000 properties across multiple markets in multiple states before targeting The Boulders,” said Bruce Savett, GCG founder and principal. “The Boulders is attractive on many fronts. We went from a Class B to a Class A property location with lower property taxes and insurance costs.”
Built in 1972, The Boulders features renovated studio, one-bedroom and two-bedroom units with in-unit washers and dryers, vinyl plank floors and kitchens with new cabinets, granite counters and stainless steel appliances, according to GCG.
GCG was able to assume a $41.2 million Fannie Mae loan fixed a 4.42 percent with all interest-only payments, well below current market interest rates. The purchase price reflected current market cap rates and was well below the value of a prior appraisal and the current property tax assessed value.
“Multifamily properties are being challenged by high operating and loan costs that are a headwind to better cash flow and appreciation,” Savett said. “The Boulders puts us in an environment to better control our costs that in turn can drive strong returns to limited partners with nearly all cashflow sheltered by depreciation.”