An Arden-Arcade apartment complex, held by its original developer since the 1960s, has been sold for the first time in nearly six decades. FPA Multifamily LLC, an Irvine-based real estate investment firm, acquired the Howe Manor apartments in a significant transaction that highlights continued investor interest in the Sacramento region's housing market.
The sale marks a major transition for the vintage property, which is now slated for significant upgrades. According to public records, the sale price was $42.5 million, reflecting the property's potential and strategic location on Howe Avenue.
Key Takeaways
- Howe Manor, a 180-unit apartment complex in Arden-Arcade, was sold for $42.5 million.
- This is the first time the property has been sold since it was constructed in 1965.
- The buyer, FPA Multifamily, plans a multi-million dollar renovation to modernize the units and common areas.
- The transaction underscores the strength of the Sacramento multifamily real estate market, driven by high demand and low vacancy rates.
A Landmark Sale on Howe Avenue
The Howe Manor apartment complex, located at 2215 Howe Ave., has officially changed ownership after being managed by the same family entity since its development. The property was originally built and held by the Harrison Family Trust, which oversaw its operations for approximately 59 years.
This long-term ownership is unusual in today's dynamic real estate market, where properties often trade hands multiple times. The sale to FPA Multifamily represents a new chapter for the 180-unit community. The price of $42.5 million breaks down to approximately $236,111 per unit.
Transactions involving legacy properties often attract significant attention from investors. These assets are seen as having untapped potential, commonly referred to as "value-add" opportunities, where a new owner can increase the property's value through strategic investments and modern management.
Understanding Value-Add Investments
In commercial real estate, a "value-add" strategy involves purchasing a property with the intent of improving it to increase its income and overall market value. This often includes physical renovations, operational improvements, and rebranding. The goal is to reposition an older asset to compete with newer properties and command higher rents.
Details of the Transaction
The sale was facilitated by the Sacramento office of CBRE, a leading commercial real estate services firm. Mark Johnson, a Senior Vice President specializing in multifamily investments at CBRE, represented both the buyer and the seller in the off-market deal.
"This was a rare opportunity to acquire a well-maintained, legacy asset in a prime Sacramento submarket," said Johnson. "Properties that have been under the same ownership for this long are seldom available. FPA Multifamily recognized the immense potential to modernize Howe Manor and meet the demands of today's renters."
FPA Multifamily is a prominent national real estate investment company known for its focus on multifamily properties. The firm has a substantial portfolio across the United States and actively seeks assets like Howe Manor where it can implement its proven renovation and management strategies.
Buyer's Strategic Vision
FPA Multifamily has a clear plan for the property's future. The firm has reportedly allocated an additional $5 million for capital improvements. This budget is intended to fund a comprehensive renovation program over the next 18 to 24 months.
Planned upgrades include:
- Interior Renovations: Modernizing kitchens with stainless steel appliances and quartz countertops, updating bathrooms, and installing new flooring and lighting fixtures in all 180 units.
- Exterior Enhancements: Repainting the buildings, upgrading landscaping, and improving the overall curb appeal of the complex.
- Amenity Upgrades: Revitalizing the community pool area, adding a new fitness center, and potentially creating a resident lounge or co-working space.
These improvements are designed to elevate the living experience for residents and position Howe Manor as a competitive option in the local rental market.
Sacramento's Strong Multifamily Market
The sale of Howe Manor is a reflection of the broader strength and appeal of the Sacramento-area real estate market. For years, the region has experienced robust demand for rental housing, driven by steady job growth, a growing population, and its relative affordability compared to the Bay Area.
Sacramento Market Snapshot
- Vacancy Rate: According to recent market reports, the multifamily vacancy rate in the Arden-Arcade submarket is below 4%.
- Rent Growth: The Sacramento metropolitan area has seen average annual rent growth of between 5% and 7% over the past few years.
- Investor Demand: The region continues to attract significant investment from both regional and national firms seeking stable returns.
The Arden-Arcade submarket is particularly attractive due to its central location, proximity to major employment centers, and access to retail and dining options along corridors like Howe Avenue and Fair Oaks Boulevard. Investors are drawn to the area's established neighborhoods and the opportunity to acquire older properties that are ripe for modernization.
The End of an Era
For nearly six decades, Howe Manor was a fixture of the local community under a single owner. The Harrison Family Trust's long-term stewardship provided stable housing for generations of Sacramento residents. The decision to sell marks a significant moment for the family and the property itself.
Such long-held assets often have a unique character and a loyal tenant base. The challenge for the new owner, FPA Multifamily, will be to implement its modernization plan while respecting the property's history and existing community.
As Sacramento continues to evolve, the repositioning of older apartment complexes like Howe Manor will play a crucial role in updating the area's housing stock. This transaction is a clear indicator that investor confidence in Sacramento remains high, pointing toward continued activity and development in the region's real estate sector for the foreseeable future.
