Originally built in 1961, the Mattox is a 57-unit garden-style apartment community in Hayward, CA —a rapidly growing workforce housing market that is experiencing a “spillover effect” of high demand from the surrounding Bay Area communities of Oakland, San Francisco, and Silicon Valley. Valiance Capital acquired this tired and dated asset in 2018 and undertook a renovation and repositioning plan to modernize and upgrade the property to its full potential. Rebranded as the “Mattox,” market demand for high quality product was clear, and Valiance executed with a rebranding campaign, modernized amenities, including a new dog park, upgraded pool, and private BBQ area, as well as fully upgraded designer interiors throughout the property.
Construction Timeline: 16 months
Stabilization Timeline: 24 months
PROJECT LEVEL IRR:
*BASED ON ASSUMPTION IF THE PROPERTY WAS SOLD TODAY.
Affordable workforce housing in the Bay Area is extremely supply-constrained, and there is pent-up demand for well-maintained, tastefully attractive housing. During a multiple-round bidding process, where Valiance wasn’t originally awarded the opportunity, Valiance’s prudence and patience paid off as the property fell out of escrow numerous times. After nearly 6 months from when the property first hit the market, Valiance was finally able to secure and purchase it at nearly 20% below its original asking price.
The property had changed hands three times in the previous 5 years of ownership, giving rise to lingering distrust from the community as well as hostile tenants. The property was not subject to rent control, and there was concern that a new owner would come into price gouge and implement unaffordable rent hikes. The challenge of renovating units without displacing or evicting existing tenants was a significant hurdle to overcome, all while Valiance made plans to invest $2 million in capital improvements into the community while maintaining strong landlord-tenant relations.
Valiance had to take a very diligent, hands-on approach and met with all residents to re-establish rapport and hosted community events to rebuild a community that was envisioned for the Property. Valiance was also able to protect the housing of its residents, some who had lived there for over 15 years. After a thoughtful strategy of rebuilding and revitalizing the community over two years, instead of one, Valiance successfully executed their business plan in 24 months and fully stabilized the project, which led to a cash-out refinance in February 2020.