Oct 25, 2017
By Ben van der Meer Staff Writer, Sacramento Business Journal
USA Properties Fund Inc. has wrapped up work on another multifamily project, though the Roseville company wasn’t the developer.
Even so, said CEO Geoff Brown, what’s now called Brookside Crossing in Lincoln feels like a new development, after USA Properties spent about $9.4 million to upgrade the property.
The company acquired the 208-unit property, then known as The Oaks at Joiner Ranch, in 2015 for about $19 million. Though USA Properties is best known as a ground-up multifamily development company, it’s also acquired and rehabbed between 15 and 20 properties in the last 18 years, Brown said.
“I will say that 18 years ago, when we started doing it, I don’t think we were that great at it,” Brown said. Rehabbing an existing property, in this case about 20 years old, requires a different skill set from ground-up development.
A new development requires a lot of coordination with consultants on different aspects of the project, he said. Acquiring a property to rehab, on the other hand, carries the biggest risk when workers have to start looking inside the walls without knowing what they’ll find.
For Brookside Crossing, USA Properties had four main components of improvements: new exteriors to cut down on moisture getting inside buildings, improvements to common areas like barbecue pits, new apartment interiors with updated flooring and cabinetry, and better lighting and landscaping.
Between the acquisition cost and the improvements and associated costs, USA Properties and its partners spent more than $28 million. “At $140,000, $150,000 a unit, you couldn’t build from the ground up with those kind of dollars,” Brown said.
During the work, residents were relocated elsewhere within the property. Brookside Crossing was an affordable housing property before and after the upgrades, and because of new property tax credits USA Properties received to help fund the renovations, had its tenure as an affordable property extended, Brown said.
In addition to USA Properties, Citi Community Capital, Riverside Charitable Corp. and WNC were partners in the project.