San Jose apartment complex sold for $53.1M with planned upgrades

A 117-unit apartment complex in downtown San Jose, Museum Park Apartments at 465 West San Carlos Street, was recently purchased for $53.1 million by Oberndorf Real Estate Management and The Bascom Group, according to siliconvalley.com and eastbaytimes.com.

The buyers see strong investment potential in San Jose's multifamily market due to high barriers for new supply, strong demographics, and ongoing job growth, which make rentals more attractive as home ownership costs rise, said Peter Oberndorf of Oberndorf Real Estate.

The complex consists of 12 adjacent three-story buildings. Plans include extensive renovations to unit interiors, as well as improvements to the property's exterior and community amenities, aiming to provide tenants with a competitive alternative to newer apartments, said Paul Zakhary of The Bascom Group.

The location in Silicon Valley is considered particularly appealing because the region continues to experience significant job and rent growth, noted Joe Ferguson of The Bascom Group.

The purchase price per unit was about $453,800, which is nearly 18% higher than the average per-unit price for South Bay apartment sales this year, though about 6.8% below the $57 million paid by the previous seller in 2020, according to commercial real estate firm Marcus & Millichap.