Waterford and CSCDA Expand into San Diego County with Acquisition of Three Escondido Multifamily Properties as part of Essential Housing Program, Lowering Rents for Qualified Residents
Waterford Property Company (Waterford) in partnership with the California Statewide Community Development Authority (CSCDA), a joint powers authority, has announced the acquisition of three Escondido multifamily properties, including:
- Alcove Apartments, a 112-unit community, built in 2019, located at 650 North Centre City Parkway
- Haven76 Apartments, a 76-unit apartment community, built in 2016, located at 2414 South Escondido Boulevard
- Rowan Apartments, a 126-unit apartment community, built in 2020, located at 700 West Grand Avenue
Waterford and CSCDA acquired the properties for $157 million from Lyon Living, the original owner and developer. Kyle Pinkalla of Northmarq represented the seller.
Upon taking ownership, Waterford, as project administrator for the property, and CSCDA will immediately lower rents for qualified new residents making between 80 to 120 percent of the area median income (AMI) under CSCDA's workforce housing program. This program was created in response to a serious shortage of affordable workforce housing for those that have been termed the "missing middle," individuals and families that earn too much to qualify for traditional affordable housing, but not enough to afford market rate rents in the communities where they work. As part of this program, annual rent increases are capped at no more than four percent and existing tenants that do not meet the income restrictions can remain in place until they elect to leave.
"When we look at the essential housing portfolio we've built this past year, we can see how powerful this program can be in bringing housing affordability to the missing middle demographic. With this program, Waterford is making a real difference in the lives of the state's teachers, government employees, military, and first responders, among others, who can now stay housed in the communities where they work and serve," said Sean Rawson, co-founder, Waterford Property Company. "The timing of this essential housing program is critical, as it provides immediate savings at a time when market rate rents across the state continue to rise."
Average in-place rent across this Escondido portfolio per unit are currently $2,800. As part of this essential housing program, average per unit rent with the new rent restrictions in place will be $2,459. With this program, residents of these three Escondido communities will realize an average discount to current in-place rents of 12.2 percent and a discount to market rate rents of 13.8 percent.
Escondido Councilmember Consuelo Martinez commented that, "Middle income housing is something that doesn't get built in our state and it's highly needed." She further shared, "What is important for me is ensuring that Escondido residents can stay living in Escondido and that rents don't continue to skyrocket."
The Escondido City Council unanimously approved the program during its October 28, 2021 City Council meeting.
"We're seeing double digit rent growth throughout San Diego County in 2021. For example, market area rents in this region have grown 4.5 percent per year over the last five years. Rents even rose in 2020 despite COVID, rising 2.4 percent, which underscores the strength of North San Diego County," added John Drachman, co-founder, Waterford. "This is a vital solution to countering the rising cost of housing in California, which is why many of the cities we are working with are now adding more properties to this essential housing program."
With this portfolio acquisition, Waterford now administers 15 communities in Southern California that have been converted from market rate to essential housing bringing its portfolio to 4,014 units and over $2.4 billion of tax-exempt bond issuances, confirming the firm as the most active sponsor in CSCDA's middle income housing program in California.
Waterford Property Company is a diversified real estate investment and development company with an established track record in the acquisition and development of over $2 billion in multifamily and commercial properties. Its expertise includes developing mixed-use multifamily projects throughout California, developing and investing in affordable housing and repositioning existing commercial properties. It is led by its co-founders John Drachman and Sean Rawson. For more information, visit www.waterfordco.com.
CSCDA is a joint powers authority founded by the League of California Cities and the California State Association of Counties in 1988 to enable local government and eligible private entities access to low-cost, tax-exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth and improve the overall quality of life in local communities throughout California. CSCDA is comprised of more than 530 cities, counties and special districts, and has issued more than $65 billion through 1,700 plus transactions across its diverse public benefit financing programs. For more information, visit www.cscda.org.
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