Marin County, Calif.—An institutional fund manager acquired a rare, un-renovated community in San Rafael, Calif.

Interstate Equities Corporation (IEC) purchased the 46-unit multifamily community from a private family owner. The 45-year-old property is still in its original condition, providing a remarkable opportunity to create value, according to IEC President Marshall Boyd.

“This was a unique opportunity based on location and property condition,” said Boyd. “In Marin County, very few apartment communities in the 25 to 100 unit range are ever available for sale. Families tend to own these properties for generations. Further, identifying a property that has been kept in good condition but hasn’t been renovated is akin to finding a needle in a haystack in the current multifamily market.”

Boyd boasted IEC’s specialty of finding these needles in the haystack. He noted that “well located, unoptimized multifamily assets” is the company’s niche.

“Our acquisition strategy is extremely targeted, which gives us a competitive edge over more general real estate fund managers,” he said. “We only acquire multifamily properties in the Bay Area and Southern California with significant opportunity to add value. Through this strategy, we are able to consistently deliver attractive yields and risk-adjusted returns to our investor base of pension funds, endowments, foundations and family offices.”

The Marin Gardens apartment community was 95 percent occupied at the time it was picked up. IEC has plans for immediate interior and exterior upgrades, including modern fixtures, custom paint and the addition of modern, drought-resistant landscaping.

Due to these upgrades, and the market, IEC expects to steadily grow rents.

“Rent growth in San Francisco has been prodigious, and it’s our belief that market rent growth in Marin will increase at an accelerated rate relative to other parts of the Bay Area,” said IEC Associate Ben Doran.

“While this property is just a 15-minute commute into San Francisco, we don’t anticipate the need to go outside the local market to maintain this property’s strong occupancy rate,” Doran added.

“There are good renters with stable income in San Rafael, which fuels our confidence in continued renter demand at the property,” Doran said. “In addition, the property is well-positioned to remain competitive in the market. Class A assets approximately 400 yards from Marin Gardens charge asking rents twice as much as the current rents at Marin Gardens.”

Ryan Wagner of Colliers represented the buyer and the seller in the transaction.