After more than twenty years of ownership, a family owner/operator decided to sell its senior apartment community in Sacramento, California. The partnership chose to engage Rob Reis and Jon Holmquist of Marcus & Millichap to quietly market their property for sale.
Built in 1971, the 103-unit community consists entirely of one-bedroom apartments. It is a hybrid between independent living and senior apartments, as the previous owner contracted in a meal service for two to three meals per day, and had a prep kitchen, not a full commercial kitchen. Common area amenities include a community room, game room, meal plan service and exercise classes. Plus, unit amenities include hardwood floors, air conditioning and a full kitchen with dishwasher.
Rents were very low, at around $750 per month, so incoming ownership should be able to at least double them (and revenues too). The property operated at a 72% expense margin on approximately $920,000 of revenue but was fully occupied.
The buyer ended up being a regional owner/operator of workforce housing communities, but a few senior apartment communities too. They beat out a couple of other offers and paid $5.5 million, or $53,400 per unit, and have plans to invest in some needed capex before increasing rents.
