Equity Residential apartment buildings sale may bring Acheson development

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Eight Berkeley apartment buildings, as well as the entitlement for a contentious development, are now up for sale.

The sale of the properties could bring rent increases for current tenants because new ownership brings a new cost of business, according to Jill Broadhurst, executive director of the East Bay Rental Housing Association. It also brings increased revenue to the city’s general fund through the 1.5 percent property transfer tax.

The portfolio contains 452 apartment units located, on average, a half-mile from campus, as well as entitlement rights to an unbuilt development — Acheson Commons — that is slated to contain 205 units located half a block west of campus on University Avenue.

“There’s not a lot of property owners that own a portfolio of properties,” Broadhurst said. “Whether you’re talking about Berkeley or Oakland, right next door, most of the property owners are mom and pop — they own one or two properties. They’re not going to sell all assets at one time.”

The properties are currently owned by Equity Residential, a national apartment acquisition, development and management company. Though the firm will sell all of its Berkeley properties, it will continue to build in the Bay Area.

This past year, Equity Residential entered into agreements to exit out of several housing markets — including those in South Florida and Denver, according to a press release dated Oct. 26. The impending sales total 72 properties and 23,262 units, at an average of $230,634 per unit. The company also plans to exit the Connecticut market next year.

Staff at Equity Residential and Eastdil Secured — the exclusive adviser for the sale of Equity’s Berkeley Apartment Collection — could not be reached for comment on the sale.

Acheson Commons’ property and entitlements could be purchased separately from Equity Residential’s existing properties. An announcement from Eastdil Secured said that it will receive offers “for the entire portfolio or for individual assets.”

Acheson Commons’ development was approved in 2013 with the intent to build 149 one-bedroom and 56 two-bedroom units across four buildings. The approved plan allowed the Acheson building to stay at four stories, while the existing one- and three-story buildings will increase to six stories.

The approved development would require 21 of the 205 units to permanently be affordable housing, or build all units at market rate and provide a $5.7 million contribution to the Berkeley Housing Trust Fund.

“By law, land use entitlements go with the property, they do not go with the owner,” said Zoning Adjustments Board Commissioner Igor Tregub.

Should the new owner not want to build Acheson Commons as entitled, any modification to a use permit would have to go through the same process as granting a new use permit, according to city spokesperson Matthai Chakko.

Contact Pamela Larson at [email protected] and follow her on Twitter at @PamReporting.