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Two high-rise apartment buildings in downtown San Jose have traded hands for a total of $380M.
A joint venture between Coastal Ridge Real Estate and Brookfield acquired The Grad, a 1,039-bed student housing tower in downtown San Jose, for $204M, while a three-party JV including Kennedy Wilson and Hulic Co. purchased One South Market, a 312-unit tower, for $176M.
The Grad, a 19-story Class-A high-rise at 88 E. San Carlos St., is one block from San Jose State University. The 543K SF L-shaped tower was completed in 2020 by developers Amcal and Swenson and has 260 units across 17 floors. It was fully occupied when the sale closed.
The sale was promoted after the former owners had trouble refinancing the property amid high interest rates, according to the Silicon Valley Business Journal. The primary investors lacked the capital necessary to obtain refinancing, Swenson CEO Case Swenson told the SVBJ.
“If I could hold on to it, I would,” Swenson said.
The Grad was refinanced in November 2024 by ACORE Capital Management, which provided a $150M loan to Swenson and Amcal, The Mercury News reported.
“The Grad is a modern, Class-A high-rise in the heart of Silicon Valley, a market with deep demand, compressed cap rates and significant barriers to entry,” Institutional Property Advisors Executive Managing Director of Investments Peter Katz said in a press release.
Katz represented the selling group, along with Marcus & Millichap's Tony Solomon.
Kennedy Wilson and Hulic joined up with Fuyo General Lease (USA) Inc. to purchase One South Market.
One South Market is a 23-story apartment building completed in 2015. Lakevision Capital sold the property after purchasing it for $175M in 2020. The property's per-unit price of $564K outstrips the five-year average in the area of $467K, the SVBJ reported.
“One South Market offers exceptional long-term fundamentals, driven by its prime downtown location, strong employment base and limited new multifamily supply,” Kennedy Wilson Multifamily Division President Kurt Zech said in a statement. “The property provides a unique opportunity to invest in a high-quality asset in one of the country’s most dynamic markets.”
CBRE’s Jon Teel represented the buyers in the transaction.
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