Interstate Equities Corporation has snapped up two neighboring Davis apartment complexes, Temescal and Pepperwood, for $42.8 million and says it plans to reposition the properties to serve University of California, Davis students. The deal covers 140 units and marks the buyer’s first major move into the Davis market. Tenants at both sites say rebranding and management changes started almost immediately, and some residents are already sounding the alarm.
Deal Details and the Properties
Interstate Equities purchased the two-property portfolio from Fox Group for $42.8 million, as reported by Multi-Housing News. The sale is the first ownership change for the communities since the 1980s, and Transwestern handled brokerage on the transaction.
Where They Sit and the Unit Mix
The portfolio totals 140 units, with 100 at Temescal at 2477 Sycamore Lane and 40 at Pepperwood at 2222 Sycamore Lane, and includes amenities such as pools, study rooms and bike parking, according to Connect CRE. As reported by The Business Journals, Interstate Equities says it intends to reorient the properties to better serve UC Davis students.
Tenants Report Immediate Changes
A UC Davis subreddit thread embedded above gathers residents' accounts of abrupt management changes, new convenience fees and messaging about lease restructuring. One post said management had "officially transitioned to individual bed-by-bed leases," a shift residents warned could allow new leases at higher market rates. Those claims remain resident reports and have not been confirmed in public filings (r/UCDavis).
Legal Note
Under California's Tenant Protection Act (AB 1482), many rental units are limited to annual rent increases of 5% plus local CPI, up to a maximum of 10%, and are covered by just-cause eviction rules. Landlords cannot sidestep those protections by relettering leases. The bill text and guidance are available from the state Legislature (California Legislative Information).
What’s Next for Students and Neighbors
Industry reporting notes that Interstate Equities has been active across the Western U.S., buying and repositioning older multifamily assets, a strategy that often includes renovations and targeted marketing to specific renter groups, according to Multi-Housing News. For tenants navigating potential lease changes, the City of Davis maintains a rental resources page with guidance on rights and local contacts (City of Davis).
Neighbors, student renters and housing advocates say they will be watching closely to see whether management shifts lead to fresh renovations, a different tenant mix, or both. We will follow official filings and owner statements and report further developments as they become public.
