Developer Waterford Property Company (Waterford) has another workforce housing trick up its sleeve.
In partnership with the California Statewide Communities Development Authority (CSCDA), Waterford announced that it paid $335.1 million for two communities in Pasadena, which it will convert into workforce housing by lowering rents. Both projects are about 96 percent occupied.
The acquisition included the Residences at Westgate, a 340-unit class A property built in 2015 at 31 South DeLacey Avenue, for $237 million. It also includes 20,521 square feet of retail space. Meanwhile, the 173-unit Hudson was completed in 2018 at 678 East Walnut Street, and traded for $98.1 million.
Using tax exempt bond financing, CSCDA can acquire multifamily projects that are providing housing for the middle-income workforce demographic. Upon taking ownership, Waterford and CSDA can immediately lower rents for qualified new residents making between 80 percent and 120 percent of the area median income. Waterford anticipates average rental savings of approximately 14 percent for new tenants.
“Each day we are reminded of the state’s housing crisis and the lack of affordable housing options for its citizens,” John Drachman, co-founder Waterford, said in a statement. “This program was created because there are very few affordable housing funding sources for the 80 percent to 120 percent average median income households.”
Since the start of the year, Waterford and CSCDA have acquired six multifamily communities in Southern California, totaling 2,022 units. In April, Waterford and CSCDA acquired Altana, a 507-unit luxury community in Glendale for $300 million. They also teamed up to acquire the 216-unit Oceanaire community in Long Beach, and the $160 million Jefferson Platinum Triangle community in Anaheim.
Joseph Smolen, Geoff Boler, and Lee Redmond of Eastdil Secured represented both parties in the transaction for the Residences at Westgate. Blake Rogers, Hunter Combs, Alexandra Caniglia, and Javier Rivera from Walker & Dunlop represented both parties for The Hudson transaction.