Newmark announces it has arranged the sale of FIVE55 Apartments, a brand new, luxury apartment building comprised of 94 residential units, located in the heart of Downtown Santa Cruz. The asset sold for an undisclosed price.
Newmark Vice Chairman Scott Bales represeted the seller, Swenson Development &
Construction. The buyer was The Dinerstein Companies.
Located at 555 Pacific Avenue, the property is situated in a high barrier-to-entry submarket and is proximate to dozens of restaurants and retailers along Pacific Avenue, the beachfront, Santa Cruz Boardwalk and Santa Cruz Wharf. Five55 is designed as a Type III, four-story, 94-unit podium project with ±5,000 square feet of ground-floor retail, leased to Current eBikes and Big Basin Vineyards. The property also includes a two-story below-grade parking structure with 100 spaces. The project was completed in April of 2018 and was 99% leased at the time of sale.
“Five55 is one of the newest multifamily developments centrally located along Pacific Street in Santa Cruz, which has seen some of the most demand growth of any market in Northern
California since COVID,” said Bales. “We are proud to have helped facilitate this transaction, and both the buyer and the seller performed exceptionally well.”
Five55’s main features include its walkability to the beach, retail and restaurants, proximity to UC Santa Cruz, luxury in-unit finishes and a best-in-class amenity package, which includes a fitness center, a community room with a pool table and kitchenette, an outdoor pizza oven, a coffee bar, bike storage, EV car charging, outdoor gathering space with fire pits and a 20,000-square-foot rooftop deck.
Santa Cruz is a ±65,000-person community located approximately 30 miles south of San Jose and 75 miles south of San Francisco. It comprises the largest city in the ±260,000-person Santa Cruz County. Renowned for its high quality of life, tourists and vacationers are drawn to Santa Cruz for its climate and beaches, surfing scene and beach downtown. The local economy, while bolstered significantly by the University of California Santa Cruz, also has a thriving tech scene, high average incomes and strong synergy with nearby Silicon Valley.
Investor appetite for U.S. multifamily assets surged during the second quarter of 2022 with $86.3 billion in sales volume, according to Newmark Research. This represented a 42.4% year-over-year increase, as well as the third-largest quarterly sum in history. Volume during the first half of 2022 accelerated 53.1% compared with the first half of 2021. This uptick in activity was in part due to buyers and sellers deliberately transacting ahead of impending FOMC rate hikes and the mid-term elections later in the year.