Secondary Markets are the Star of the Show for This New Normal

Demographic shifts into California’s more affordable regions continue to benefit the commercial real estate market in California’s Central and Sacramento Valley, particularly in the multifamily sector. A recent example is Westlake Apartments, a 148-unit multifamily property located at 1 Shoal Ct. in Sacramento which sold for $38 million.

Newmark’s William Blucher and Ali Nadimi brokered the sale. Graceada Partners’ sold Westlake Apartments after a significant renovation and improvement plan. The community with lakeside location in the city’s desirable Pocket neighborhood achieved post-renovation rent of $1,825 per unit versus $1,225 at acquisition.

“We’re secondary market investors at our core, and we’ve been tracking a trend that started before the pandemic but has surged since 2020,” said Joe Muratore, principal and co-founder of Graceada Partners. “This new sale underscores the secular shift to an outpost economy, booming in markets around the nation. Secondary markets are the star of the show for this new normal.”

During the 15-month hold period, Graceada Partners performed renovations on 36 of the 148 units and recognized lease turnover rent increases up to 43 percent.

“This investment utilized many institutional strategies we employ across our portfolio including dynamic rent pricing, asset optimization AI software, technology-enabled leasing and adding in-demand amenities like EV charging stations,” said Ryan Swehla, principal and co-founder with Graceada Partners.