Bridge Housing is offering the Bay Area an affordable housing lifeline, after acquiring Avalon Communities Daly City property for $66 million.
The property, located at 500 King Drive, is under the “Eaves” brand. The 195-unit community is 140,000 square feet, and was sold for more than three times its market value of $21 million, according to property records.
Apartments within the community range from about 450 to 1,000 square feet and offer studio, one bedroom and two bedrooms options. Market rate rents range from $2,100 to $3,200.
Affordable units are offered to individuals earning up to 80 percent of the area’s median income.
Bridge’s aim is preserving those offerings in a market desperate for affordability.
“It’s a huge concern everywhere,” Jet Doye from Bridge, told The Real Deal. “We can’t build the amount of affordable housing that’s needed to meet the affordable housing crisis, and if you’re losing units there’s just no way.”
“Assembling a low-income housing capital stack can require 12 different financing partners, and that can take 2-5 years,” Doye added. “During that period of time a non profit developer has carried costs risks, construction cost risk, and interest rate risks. Also, you tend to see a correlation between higher cost areas and deeply engaged citizens who don’t want multifamily housing in their community.”
To secure the funding, Bridge partnered with Morgan Stanley and Nation Equity Fund, and believe that partnership will allow them to compete with the blue blood investors and developers.
“It gives us the flexibility and the speed we need to enter the acquisition market,” Doye said. “It’s just so much faster than ground up. It allows us to add so many more affordable units to these communities.”
This is Bridge’s second acquisition, the firm also acquired a Marin County property. The Terra Linda Northview Apartments in San Rafael were bought for $12 million last September, and Bridge also partnered with Morgan Stanley and NEF on the deal as well. The goal is to ensure 125 units stay restricted to 80 percent of the AMI for 99 years.
Correction: It was previously reported that the affordability threshold was 50 percent.
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