Stanford pays $130 million for Los Altos apartments
LOS ALTOS — Stanford University, seeking to provide an additional housing choice for faculty and staff near the campus, has paid $130.5 million for an upscale apartment and retail complex in Los Altos.
The university bought Colonnade Los Altos, a complex of 167 apartments and 12,000 square feet of retail space, located at 4740 El Camino Real.
The deal, completed April 20, could help some people at Stanford contend with a dearth of housing as rents and home prices rise in the Bay Area.
“Stanford continues to work to expand local housing options for faculty and staff,” said Ernest Miranda, a Stanford University spokesman. “The Colonnade makes additional rental housing available to members of the university community.”
The price that Stanford paid is well above the property’s previous value as calculated by the Santa Clara County Assessor’s Office, which estimated the complex was worth $85.1 million in mid-2016.
“What we’ve heard is that Stanford is always looking for housing solutions for its employees and faculty,” said Steven Seligman, a first vice president and regional manager with Marcus and Millichap, a commercial realty brokerage.
The deal also highlights the complexities of the Bay Area economy, and the strains it can impose on residents and job seekers even as it provides opportunities for those who land well-paying jobs.
On one hand, the region is one of the hottest job markets in the nation. The pace of job growth in the Bay Area’s three major urban centers — Santa Clara County, the East Bay and the San Francisco-San Mateo region — have outpaced the rate of employment gains in the United States and California. Yet at the same time, the white-hot job market has helped to shove home prices and residential rental rates higher and to snarl traffic.
“We have this fabulous area that we live in, and Stanford is a tremendous attraction for professors,” Seligman said. “Yet at the same time, how the heck can you afford to buy a home here?”
During the 15 months that ended in March, a stretch that included all of 2016 and the first quarter of 2017, several apartment complexes in Santa Clara County sold for more than the Colonnade Los Altos complex that Stanford bought, according to research compiled by Marcus & Millichap.
In February 2016, the Woodland Park Apartments in East Palo Alto were bought for $412.5; in August 2016, the Indigo Apartments in Redwood City were bought for $320 million; in June 2016, the Franklin 2099 apartments in Santa Clara were bought for $212.7 million; in September 2016, The Marston by Winsdor complex was bought for $153 million; and in June 2016, the Foxchase apartment complex was bought for $150.5 million, according to Seligman and Marcus & Millichap.
At Colonnade Los Altos, a one-bedroom apartment ranging in size from 547 to 1,024 square feet was being offered for $2,391 to $3,311 a month. Two-bedroom units ranging in size from 955 to 1,222 square feet were being offered for $3,458 to $4,396, according to the Colonnade Los Altos site.
“This shows how serious this problem is,” said Russell Hancock, president of Joint Venture Silicon Valley. “World-class companies and world-class institutions, who are paying their people handsomely, are finding that it is still not enough for them to crack into the housing market. This is a huge problem.”
The university, Hancock said, has gone to great lengths to create denser housing on campus. It’s also constructing a big residential complex of 180 units on South California Avenue. Stanford bulldozed four office buildings to make way for the homes.
“Stanford has been a champion on the housing front,” Hancock said.