Step Up Housing has closed a $57 million deal for Bay Village Apartments in Vallejo, scooping up the 260-unit garden-style complex that looks out over the waterfront. The nonprofit says it plans to preserve the property and convert a chunk of the homes to long-term affordable housing, while Sack Capital Partners arranged the financing and will run property management. Institutional Property Advisors represented the seller in the transaction.
Who Wrote the Check and How the Deal Pencils Out
Sack Capital Partners and Align Finance Partners put together structured financing to support the $57 million acquisition, and Sack will also handle asset and property management, according to Connect CRE. “We are committed to maintaining the unusually high quality of this affordable asset,” Sack managing partner Jeff Smith said in that coverage. Institutional Property Advisors served as the seller’s broker.
City Backing, Bond Money and Affordability Rules
The Vallejo City Council previously signed off on a request for the California Municipal Finance Authority to issue tax-exempt bonds to support the conversion, a move that could allow up to $80 million in borrowing, per Vallejo Sun. The outlet reports that Step Up’s plan would set about 26% of units at 50% of area median income and roughly 55% at 80% AMI, with the bond coming with a 40-year affordability requirement. Step Up chair Michael Potter told council members that “no residents will be displaced” during the transition.
Life at Bay Village: Low-Density, Bay Views, Commuter Access
Bay Village is a low-density waterfront community with one- and two-bedroom homes and on-site perks including a pool, clubhouse, fitness center and dog park, according to Bay Village Apartments. The roughly 18.6-acre site is framed by mature landscaping and bay views, CityBiz notes, and its location offers quick access to I-80 and a short hop to the Vallejo ferry.
A Quiet Strategy to Lock In Affordability
Step Up has been steadily building a portfolio of mission-driven properties across the East Bay; RENTV reported the nonprofit’s recent purchase of a 148-unit property in Pinole. Step Up describes itself as a nonprofit owner and manager focused on creating and preserving affordable housing for low- and moderate-income households, according to Step Up Housing, and leaders told Vallejo officials they already have financial backers lined up to carry out the Bay Village conversion. That model, in which a nonprofit buyer uses bond financing and structured private capital with an experienced manager, is increasingly used to secure long-term affordability in older apartment communities.
The Bay Village deal adds to a quiet but meaningful wave of preservation transactions that aim to keep Bay Area housing affordable without building from scratch. The sale was first reported by Connect CRE and has since drawn additional coverage from regional outlets including CityBiz and the Vallejo Sun.
