Waterford Property Co., in partnership with the California Statewide Community Development Authority (CSCDA), has acquired Westgate Apartments, a 480-unit multifamily property located in Pasadena, California, for $280 million from Equity Residential.
Upon taking ownership, Waterford, as project administrator for the property, and CSCDA will lower rents for qualified new residents making between 60% and 120% of the area median income (AMI) under CSCDA’s middle-income housing program.
In addition, Waterford and CSCDA will allocate 45% or 216 of the units to be rented to tenants who earn no more than 80% of the AMI. Ninety-six of the units will be rented to very low-income tenants making under 50% of the AMI. Existing tenants that do not meet the income restrictions can remain in place until they elect to leave, according to the new owners.
“This property provides a valuable opportunity to further expand the amount of affordable housing available in Pasadena. We appreciate the city’s willingness to incorporate this program into their existing housing stock to provide much-needed affordability to existing and future residents,” said Sean Rawson, co-founder of Waterford.
This acquisition marks the fourth property in Pasadena to be converted to “essential housing” by Waterford and CSCDA, bringing the total workforce housing units available in the city to 1,098 total units. “We are extremely proud of our partnership with the city of Pasadena,” Rawson added.
Built in 2010, Westgate Apartments provides contemporary amenities in a convenient location within walking distance of Old Town Pasadena.
According to Waterford, the average per unit market rent is $3,241 in the immediate area. With this essential housing program, per unit rents at the development will be $2,354 in the first year.
Blake Rogers, Hunter Combs, Alexandra Caniglia, and Javier Rivera of Walker & Dunlop represented Waterford in the transaction.
Waterford administers 12 communities in Southern California that have been converted from market rate to essential housing, bringing its portfolio to 3,700 units and over $2.2 billion of tax-exempt bond issuances, confirming the firm as the most active sponsor in CSCDA’s middle-income housing program in California.
CSCDA is a joint powers authority founded by the League of California Cities and the California State Association of Counties in 1988 to enable local government and eligible private entities access to low-cost, tax-exempt financing for projects that provide a tangible public benefit, contribute to social and economic growth, and improve the overall quality of life in local communities throughout California. CSCDA is comprised of more than 530 cities, counties, and special districts, and has issued more than $65 billion through 1,700 plus transactions across its diverse public benefit financing programs.
For the Westgate development, CSCDA partnered with Goldman Sachs as underwriter, Orrick, Herrington & Sutcliffe as bond counsel, Waterford Property Co. as project administrator, and the city of Pasadena, in connection with the acquisition of the project and issuance of bonds.
