PASADENA, CA -Waterford Property Company in partnership with California Statewide Community Development Authority (CSCDA) has acquired THEO, a 105-unit multifamily community located at 289 N. El Molino Ave. in Pasadena, for $67 million.
Upon taking ownership of THEO, Waterford, as project administrator, and CSCDA will immediately lower rents for qualified new residents making between 60% to 120% of the area median income (AMI) under CSCDA’s middle income housing program. Annual rent increases are capped at no more than 4 percent and existing tenants that do not meet the income restrictions can remain in place until they elect to leave.
Average in place rent per unit at THEO is currently $3,562. As part of this essential housing program, average per unit rent with the new rent restrictions in place will be $2,860. Each unit will recognize a savings average of $702 per month or $8,421 on average per year, decreasing rents 19.9 percent below current in-place rents.
“This is more than a real estate transaction. This program benefits people. It provides a vehicle to make housing in California more affordable while providing residents a chance to experience real savings. We believe this program will help our essential workers, such as medical workers, teachers, and service professionals, remain in the cities where they work,” said Sean Rawson, co-founder, Waterford Property Company.
This is the third property in Pasadena added to Waterford’s essential housing portfolio. Waterford now administers 10 communities in Southern California that have been converted from market rate to essential housing bringing its portfolio to 2,748 units and over $1.6 billion of tax-exempt bond issuances, further making the firm one of the most active sponsors in California.
The Pasadena City Council approved the transaction at its August 2 meeting in a 9-0 vote. Pasadena Councilmember and Chair of the Economic Development Committee Tyron Hampton confirmed his approval for the project noting, “This brings us definitely needed workforce housing…which is something we need…It was a unanimous decision from the committee in favor.“
“The San Gabriel Valley multifamily market is experiencing record low vacancy rates at 1.7 percent. This allows landlords to dramatically increase their market rents. By reducing rents for essential workers, we are providing a solution to the challenges many renters are and will be facing. We are thankful that the city of Pasadena has recognized this issue and is working with our team to do something to help,” said John Drachman, co-founder, Waterford.
Institutional Property Advisors’ Kevin Green and Gregory Harris represented Waterford in the transaction with the seller Summerhill Communities.