A joint venture of Archway Equities and Virtú Investments has acquired The James, a 190-unit Class A luxury apartment community in downtown San Jose, Calif., from Fairfield. The duo bought the property for $74.25 million.
Brian Eisendrath of Institutional Property Advisors arranged acquisition financing, which was provided by Freddie Mac. The size of the loan could not immediately be learned. The property was marketed by a Berkadia team comprised of Brett Betzler, Kaohu Berg-Hee and Rachel Parsons.
Virtú Investments will manage the property through North Coast, its property management division.
The acquisition is the second significant multifamily investment Archway Equities has made in California in the past six months. In May, the firm acquired The Paseos at Montclair North, a 385-unit multifamily property in the Inland Empire community of Montclair, Calif., for $150 million from 4914 Olive Street Properties LLC. At the time, it was 2023’s largest single multifamily transaction in Southern California.
Sean Moghavem, Archway Equities’ president, said in a prepared statement that he sees more sellers entering the market, creating selective opportunities to acquire high-quality assets in supply-constrained coastal markets with strong multifamily fundamentals at prices that allow the firm to generate attractive risk-adjusted returns for its investors, despite the high interest rate environment.
Virtú Investments Principal Michael Green, in prepared remarks, noted that his firm had taken a multi-year hiatus from acquisitions before this deal, praising the San Jose metro as a sound market with attractive fundamentals. Virtú plans to deploy additional capital through the end of this year and into 2024.
The James
Located at 98 N. First St., The James is a six-story pedestal-style building with studio and one- and two-bedroom units built over 7,256 square feet of street-level retail and a 251-space subterranean garage. The property was 95 percent leased at closing.
Community amenities include a fitness center, resort-style pool, resident clubhouse, conference rooms, outdoor meeting areas with barbecues and fit pits, a dog washing station and a bicycle storage facility.
Downtown San Jose is home to major employers, including Adobe, Zoom, PwC and Deloitte. The James is served by a network of rail mass transit, including VTA light rail, Amtrak, Caltrain and a future BART station that will be located across the street from the property. BART will provide residents access to major employment hubs throughout the San Francisco Bay Area. San Pedro Square Market, a popular dining, nightlife and shopping destination, is within walking distance of The James.
Sankeerth Pulsani, Archway managing director, said in a prepared statement that the firm expects more workers to return to offices, which will strengthen demand for well-located, quality rental housing.
Earlier deals
Based in Beverly Hills, Calif., Archway Equities and its principals have been active in U.S. real estate since 1974. The firm has been focusing primarily on multifamily investments since 2010. In addition to the Inland Empire acquisition earlier this year, Archway expanded its holdings in the Dallas-Fort Worth Metroplex with the August 2022 purchase of the 192-unit Toscana Apartments.
In June 2022, Larkspur, Calif.,-based Virtú Investments sold Foothill Ridge, a 232-unit community in Upland, Calif., to Clear Capital for $82 million. In January 2022, Virtú acquired the 154-unit Cerasa in Bellevue, Wash., from Evergreen Point Development for $109 million.
