Colliers' Sacramento multifamily brokerage team has closed a $16 million sale of 2850 Cottage Way, a 100-unit apartment complex in Sacramento, wrapping the deal on Friday after it nearly went off the rails. The property traded at a 6.53% going-in cap rate, with the brokers reworking the building's financial picture and securing lender concessions to keep the transaction alive. The buyer, working under a 1031 exchange deadline, needed a fast, straightforward closing to lock in a replacement property on time.
As reported by ConnectCRE, Colliers EVP Aaron Frederick, SVP Matt Sarro and associate George Melski represented the buyer and steered through multiple underwriting and property-condition complications. According to the team, the seller had been self-managing the complex and expensing nearly everything on the profit-and-loss statement, which depressed the reported net operating income and led the lender to trim loan proceeds.
How the brokers rebuilt the case for financing
“With a 1031 exchange underway, he reached out to us to help identify suitable replacement properties,” the Colliers team told ConnectCRE. To get lenders comfortable, they said they "rebuilt the financials by analyzing rental income and applying expense assumptions" drawn from comparable properties. When deferred maintenance issues surfaced, the buyer requested concessions, and cooperation between both sides' brokers became critical to keeping the deal from falling apart.
Why the 6.53% cap rate matters
The 6.53% going-in cap rate sits above the very low yields that marked Sacramento's hotter years and reflects today's higher borrowing costs and stricter underwriting standards, a trend echoed in recent market coverage. Colliers notes in its Sacramento multifamily report that cap rates have moved up and are “likely to continue rising” as buyers and sellers adjust to current interest rate conditions. That environment helps explain why the brokers leaned on pro forma underwriting instead of walking away when loan dollars were cut.
Market snapshot: what comps are showing
Mid-2025 analyses peg the average cap rate for sold Sacramento apartment properties at around 5.9%, which means deals in the high-5% to low-6% range are becoming standard for older garden-style communities. Analysts at Analytics.Loan report that most recent transactions and underwriting scenarios line up with cap rates in a 5.5% to 6.5% band as both buyers and lenders recalibrate. In that light, a 100-unit property selling for $16 million at a 6.53% cap rate fits neatly within current pricing for seasoned private or smaller institutional buyers.
Who closed it and the takeaway
The deal was guided by Colliers EVP Aaron Frederick, SVP Matt Sarro and associate George Melski, a trio that has been among the busier multifamily brokerage teams in the region, with Colliers' local materials highlighting their focus on 1031 exchanges and buyer representation. The transaction underscores how hands-on underwriting, including rebuilding profit-and-loss statements, pushing lenders for realistic debt terms, and negotiating concessions tied to property condition, can revive a shaky deal and help establish pricing benchmarks for similar Sacramento assets going forward.
