Bascom Group and Oaktree's $126 Million Investment in West Sacramento's Class 'A' Apartments

Major Acquisition in West Sacramento: Bascom Group and Oaktree Capital Join Forces

In a significant move in the real estate market, the Bascom Group, LLC has partnered with funds managed by Oaktree Capital Management, L.P. to purchase The Strand, a newly constructed 408-unit garden-style apartment community in West Sacramento, California. The transaction was valued at an impressive $126 million, averaging $308,824 per unit.

A Prime Location for Growth

Completed in 2021 by MBK Rental Living, The Strand sits in a highly sought-after area known for its robust housing market, including multimillion-dollar homes and attractive amenities such as riverfront walking trails and nearby retail options. This community offers residents the luxury of suburban living with the convenience of being just a short 10-minute drive from downtown Sacramento. With this strategic acquisition, the Bascom Group aims to tap into the thriving West Sacramento real estate market, which continues to attract both residents and investors.

Attractive Amenities Enhance Marketability

The Strand features a diverse mix of units, with 7% of them being junior one-bedroom apartments, 34% one-bedroom, 51% two-bedroom, and 7% three-bedroom configurations. This variety caters to a broad audience aiming to enjoy both comfort and convenience. Among the community's highlight amenities are two pools and spas, indoor and outdoor fitness centers, a well-equipped clubhouse, a dog park, and even electric vehicle charging stations.

Expert Financing and Future Plans

Debt financing for the acquisition was arranged by Berkadia, with Jason Parr and Scott MacDonald leading the investment sales team representing the seller. Meanwhile, Luke Goodwin and Alex Porter from Walton Street Capital provided the acquisition loan. Sares Regis, a reputable property management company, has been engaged to ensure optimal management practices are adhered to.

Jim Singleton, Senior Vice President of Acquisitions at Bascom, expressed optimism about the acquisition, highlighting the asset's positioning in a durable market with limited future supply. He noted that The Strand competes effectively due to its high-quality finishes and desirable location.

Understanding Market Dynamics

The Sacramento real estate market is projected to experience a decrease in new multifamily deliveries, which will likely enhance the appeal of existing properties like The Strand. With a stable population growth forecast, Bascom and Oaktree are poised to capitalize on these favorable market conditions over the coming years. Sacramento has established itself as a recession-resistant market, drawing companies and residents who prioritize affordability along with diverse economic opportunities.

Notable institutional investments within close proximity further emphasize the area's growth potential. Key landmarks and projects such as the Sacramento Kings' Golden 1 Arena, the new CalSTRS building, and Sutter Health Park, all located within a 1.5-mile radius, are likely to bolster local demand for housing.

Building on a Successful Partnership

The Bascom Group and Oaktree have a history of successful collaborations, having previously partnered on several multifamily assets across the U.S. Since its inception, the partnership has acquired a total of 31 multifamily properties, amassing over 10,000 units with an overall project cost of $1.5 billion. Their experience in the market equips them well to navigate the evolving landscape, especially in light of recent shifts in interest rates and asset valuations.

Paul Diamond, Senior Principal at Bascom, encapsulated the sentiment, emphasizing the unique advantages of The Strand and expressing excitement about using their combined expertise to further enhance the property’s value.

Conclusion

As the Bascom Group and Oaktree Capital dive into this new investment, both firms remain steadfast in identifying and exploiting lucrative opportunities within the multifamily housing segment. The successful acquisition of The Strand marks yet another critical step in their strategic efforts to expand and enhance their holdings in one of California's most promising real estate markets.