Waterford Property Co. and the California Statewide Community Development Authority have partnered to acquire the 314-unit Lyon Living portfolio from Lyon Capital Ventures for $157 million. The properties include the Alcove, Haven76 and Rowan Apartments in Escondido, Calif.
The four-building, 112-unit Alcove, located at 650 Centre City Pkwy, offers one- and two-bedroom apartments, averaging 1,012 square feet. Constructed in 2019, unit amenities include above-standard ceiling heights in select units, semi-private entry, private balconies/patios, washers/dryers and microwaves. Residential amenities include controlled access, a fitness center, a business center, a clubhouse, a swimming pool and spa. Detached garages are also available.
The three-building, 76-unit Haven76, located at 2412 South Escondido Blvd., offers one-, two- and three-bedroom units, averaging 962 square feet. Constructed in 2016, unit amenities include combination entry, above-standard ceiling heights, private balconies/patios, washers/dryers and microwaves. Residential amenities include controlled access, a fitness center, a business center, a clubhouse, a swimming pool and spa.
The three-building, 126-unit Rowan, located at 700 W. Grand Ave., offers one-, two- and three-bedroom units, averaging 1,091 square feet. Constructed in 2020, unit amenities include above-standard ceiling heights, private balconies/patios, washers/dryers and microwaves. Residential amenities include controlled access, fitness center, a business center, a clubhouse, a swimming pool and spa. The Rowan also features 1,000 square feet of ground-floor retail space.
The CSCDA provides California’s local governments with an effective tool for the timely financing of community-based public benefit projects. The low-cost bond financing provided allowed the buyers to be aggressive on pricing with units selling at $500,000 per unit. As part of the CSCDA’s middle-income housing program, the Alcove, Haven76 and Rowan will now serve residents making between 60 and 120 percent of the area median income for San Diego County.
Sean Rawson, co-founder of Waterford Property, said San Diego County has experienced some of the highest rent growth in the country. Cities like Escondido need more affordable housing as middle-income residents continue to be priced out of the metro areas.
“Waterford has been very active this past year in California,” Rawson told Multi-Housing News. “The firm has acquired $2 billion in multifamily assets under the essential housing platform.”
Waterford worked with the city of Escondido to identify properties for acquisition and will convert the Alcove, Haven76 and Rowan to essential housing. Rawson noted on average the firm lowers rents on the properties it acquires through the essential housing platform by around 13 percent.
The seller was represented by Northmarq Managing Director Kyle Pinkalla and Associate Vice President Erik Anderson. According to Pinkalla, the Lyon Living portfolio is the third apartment transaction in Escondido in December, all aimed at preserving middle-income housing options.
Escondido has 69 residential properties, totaling 8,979 units, according to Yardi Matrix. Developers are planning two new properties that would add 474 units and there are three prospective developments that would add another 363 units. The city has seen 19 residential properties trade hands in the past five years, with an average sale price of about $216,912 per unit.