Later this month, Sares Regis Group of Northern California (SRGNC), which celebrates it 20th anniversary in 2013, is scheduled to open The Plaza, an apartment building with 307 workforce rental units that’s part of a the first phase of a 20-acre master planned redevelopment. Rents at The Plaza for a one-bedroom will be $2,300 per month, and $3,000 per month for a two-bedroom. One-fifth of the apartments are set aside for families at below-market rates.
The Plaza is one of 13 multifamily rental projects that SRGNC has in the works. The company has repurposed its sale staff to focus on selling rental apartments, and currently has more than 600 rental units under construction in the San Francisco-San Jose Bay Area, another 600 about to break ground, and 1,000 in the entitlement phase. Other projects that are slated to open this year include Township, a community in Redwood City, Calif., with 132 luxury apartments ranging from 630 to 1,200 square feet, which will open in September; and a 155-unit complex in San Mateo, Calif., scheduled to open in either December 2013 or January 2014.
The San Mateo project is a partnership between SRGNC and the AFL-CIO Building Investment Trust (BIT), which has invested in more than 12,000 apartment units across the country in the past 20 years. A BIT affiliate will be the San Mateo property’s manager.
In California's Foster City, SRGNC is partnering with Northwestern Mutual, which owns the property and is providing construction financing. JPMorgan Chase and Comerica are providing the new development financing; in Redwood City. “The institutional interest in close-in multifamily is still very strong,” says Todd Regonini, SRGNC’s chief development officer, who spoke with Builder on Tuesday with Rob Parker, the company’s chief marketing officer.
Sares Regis’ longtime experience as a multifamily developer gave its division a competitive edge to get involved in these projects. “The competition is hot because this is a constrained market; what we're essentially doing is repurposing obsolete and outdated properties, and that takes a lot of expertise.”
For example, the site in San Mateo was a former auto dealership that had been vacant for almost a decade. SRGNC was the sixth company that tried to get this site entitled for high-density housing. What Sares Regis did, explains Regonini, was to work with the city and other local stakeholders to scale down the density to 155 luxury residences, and include underground parking, a pool, spa, and other amenities. At Foster City, the amenities package includes centers for fitness, wellness, and media, a swimming pool and zen garden, a city park, and ground-floor retail and restaurants.
From an architectural standpoint, Parker says that each project will have its own unique features. “We don’t have a cookie-cutter format, and none of our floor plans or exteriors are similar,” he says.
The Redwood City project, which will be four stories over parking, will feature apartments designed to look like “grand lodges,” with gabled roofs, shingle and stone facades, high-efficiency vinyl windows, and some Craftsman-like materials to boot. On the other hand, another project, in Los Altos, Calif., will be more California/Spanish Colonial in design. (Devcon Construction is the contractor on several of these projects.)
Both officials believe that the demand for rental apartments is sustainable because of the past 10 years, according to Parker, when there was a dearth of new buildings that came onto the market. During that period, however, the number of households kept increasing, “so every year we got further behind the eight ball” in terms of supply. Regonini notes that most of the buildings SRGNC’s projects compete against are a decade old and don’t have the amenities that most renters—especially the younger Silicon Valley techs that Sares Regis is courting—have come to expect.
Despite this demand curve, SRGNC will confine its growth within the Bay Area for the immediate future.
John Caulfield is senior editor for Builder magazine.
This article has been updated and corrected since it was originally published.