BRE Buys 226-Unit Property in San Jose, CA

BRE Buys 226-Unit Property in San Jose, CA SAN FRANCISCO, CA - BRE Properties, Inc. (NYSE:BRE) today announced the acquisition of Fountains at River Oaks, a 226-unit property in San Jose, Calif., for a total purchase price of approximately $50.3 million. In connection with the acquisition, the company assumed an existing $32.5 million secured mortgage loan, which bears a 5.74% interest rate and matures in 2019.

The property, which was built in 1990, comprises 24 garden-style two- and three-story wood-framed buildings on 8.18 acres. BRE plans to invest additional capital over the next two years to renovate the community. The initial year-one capitalization rate on the investment is approximately 5.2%. After completion of the renovation, BRE expects to achieve a stabilized capitalization rate of approximately 6.1%.

Located in an area of Silicon Valley known as the 'innovation triangle,' the property is within three miles of major technology employers, including Cisco Systems' world headquarters, Oracle (Sun), Intel, Applied Materials, Lockheed Martin and Cadence Design Systems; the Great Mall of the Bay Area is two miles from the property.

"Fountains at River Oaks is ideally suited to BRE's investment strategy," said Stephen C. Dominiak, BRE's executive vice president, chief investment officer. "The community is close to major employers, shopping, entertainment and freeways, and two public transit systems. Also, its proximity to three other BRE communities, including another recent acquisition, Museum Park in San Jose, provides BRE with operational and staffing efficiencies. The total acquisition cost is below replacement cost for similar product in this submarket today."

BRE Properties, based in San Francisco, Calif., owns and manages apartment communities convenient to its residents' work, shopping, entertainment and transit in supply-constrained Western U.S. markets. BRE directly owns and operates 75 apartment communities totaling 21,604 units in California, Arizona and Washington. The company invests in communities through acquisition and development, and currently has five properties in various stages of development and construction, totaling 1,568 units, and joint-venture interests in 13 additional apartment communities, totaling 4,080 units. BRE Properties is a real estate investment trust (REIT) listed in the S&P MidCap 400 Index.
Source: BRE Properties

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