Rising interest rates and a wobbly economic outlook have curbed sales volume across the country, but when it comes to an affordable housing unit in one of the nation's priciest markets, investors proved willing to press forward.
A joint venture between Positive Investments and the Foundation for Affordable Housing placed the winning bid for the Plaza Grande Apartments in Salinas, California, a low-income housing tax credit property in an opportunity zone, two designations that provide a mix of tax benefits. The deal for the 92-unit property at 50 E. Market St. closed for $9.25 million, or more than $100,000 per unit, and earned a 2023 CoStar Impact Award as judged by outside real estate professionals familiar with the market.
With housing at a premium in the coastal city, affordable options such as the Plaza Grande Apartments are in short supply. Workforce housing demand in the area has meant vacancy rates have dropped to about 3% over the past year, according to CoStar data.
What's more, its status as a LIHTC property means it benefits from a more stable tenant base and consistent, government-backed rent payments that made it another draw for the new owners.
About the project: The Salinas property was built in 2003 and is located in Monterey County, just a few miles east of the Pacific Coast. Limited construction and rising demand throughout California have consistently driven rates up, rising an annual average of more than 5.5% over the past decade, according to CoStar data.
What the judges said: "The Plaza Grande Apartments are addressing the huge universal need for affordable housing," said Cannery Row Co. Chief Operating Officer William Grimm, adding that not only does it preserve options for lower-income renters, but the buyer is also able to benefit from the "considerable tax advantages," thanks to the property's location in an opportunity zone.
They made it happen: Otto Ozen and Nazli Santana of the Mogharebi Group represented the seller.
