RREEF Sells Interest in Alameda Apartments
Submitted May 26, 2010, 2:15 PM
RREEF, the real estate division for the asset management activities of Germany’s Deutsche Bank AG, has sold its interest in the Summer House apartments in Alameda for $86 million to San Francisco’s PCCP, the former Pacific Coast Capital Corp. Beverly Hills-based Kennedy Wilson has retained its ownership in the 615-unit property, according to industry sources.
RREEF and Kennedy Wilson owned the property together for four years and have been involved in the asset since it was first redeveloped. RREEF owned the property in its open-ended, value-added commingled fund, RREEF America REIT III.
RREEF and Kennedy Wilson refused comment for this story. Several calls to PCCP were not returned.
According to industry sources, the cap rate on the transaction was in the low 6 percent range based on existing net operating income produced by the property. The rents are at market, so the expectation is that the property income will not change much until the economy improves and there is job growth.
The property as it stands now is considered a stable asset. The occupancy level in the complex is 95 percent and is expected to hold. According to industry sources, no new apartment construction is planned in the region for the near future.
The deal with Summer House will strengthen Kennedy Wilson’s position in the Northern California market. It now runs a portfolio in the region with more than 2,500 apartment units.
