Granite Capital Group Closes $58 Million Purchase

Granite Capital Group, (GCG), a Santa Barbara, Calif. real estate investment firm with multiple real estate holdings in Colorado, Montana, Texas and California, completed a $58 million purchase of The Boulders Apartments, a 164-unit multifamily community in Walnut Creek, California. The transaction was brokered by the Northern California team of Institutional Property Advisors. Escrow closed November 6.

Proceeds from the sale of GCG’s Enclave Belle Creek apartments in Denver, Colorado were used in The Boulders purchase using a 1031 Tax Deferred Exchange. The 16-building complex includes a fitness center, two pools and a clubhouse. “We evaluated over 2,000 properties across multiple markets in multiple states before targeting The Boulders,” says Bruce Savett, GCG founder and principal. “The Boulders is attractive on many fronts. We went from a Class B to a Class A property location with lower property taxes and insurance costs.”

Built in 1972, The Boulders has been extensively improved and features renovated studio, one-bedroom and two-bedroom units with in-unit washers and dryers, vinyl plank floors and kitchens with new cabinets, granite counters and stainless steel appliances. The property is approximately 1 mile north of downtown Walnut Creek with easy access to a BART station for connection to San Francisco and Silicon Valley. It is also adjacent to numerous trails including the Iron Horse Regional Trail, providing access to 32 miles of biking and hiking.

GCG was able to assume a $41.2 million Fannie Mae loan fixed a 4.42 percent with all interest-only payments, well below current market interest rates. The purchase price reflected current market cap rates and was well below the value of a prior appraisal and the current property tax assessed value. “Multifamily properties are being challenged by high operating and loan costs that are a headwind to better cash flow and appreciation,” says Savett. “The Boulders puts us in an environment to better control our costs that in turn can drive strong returns to limited partners with nearly all cashflow sheltered by depreciation.”

An additional $2.3 million in partnership interest is being offered to accredited investors with the funds used to further upgrade the property and for operating reserves.

About Granite Capital Group

Granite Capital Group (GCG) provides an array of commercial real estate services to accredited investors including sponsored investment investments, in-depth expertise in structuring and executing 1031 exchanges, asset management, real estate portfolio analysis, and advisory consulting services. GCG was formed in 2015 by principal, Bruce Savett, as an outgrowth of his former partnership which he co-founded in 2003. GCG was formed to pursue opportunistic real estate investments in the western United States with a focus on value-add repositioning, ground-up development, and asset management of multifamily, industrial, and retail assets. http://www.gcg-re.com