JLL Provides $204M Freddie Mac Loan for San Jose Housing Complex Acquisition

Standard Communities and Vistria Group have secured $203.5 million in acquisition financing to buy Park Kiely, a 948-unit apartment community that will be converted to affordable housing in San Jose, Calif.. 

JLL provided the acquisition debt through its agency lending arm, while JLL’s Ryan Wagner arranged the transaction. The joint venture acquired the asset from Greystar in a $410 million deal that closed the deal in just 34 days, according to a release. 

Standard Communities and Vistria Group provided the remaining $206.5 million in equity.

The acquisition of Park Kiely marks the largest single-asset transaction in Standard’s history and, upon the finalization of rent adjustments, will stand as the largest market-to-affordable conversion completed in California.

Jeffrey Jaeger, co-founder and principal at Standard Communities, told CO that his firm’s goal is to provide institutional-quality housing through socially good policies, and that buying a complex formerly owned by Greystar within the expensive Silicon Valley area fits into that plan. 

“There are few opportunities in the Bay Area at the scale and impact Park Kiely achieves, especially understanding what’s going on with artificial intelligence and the huge housing crisis that is continuing to impact the country and Bay Area,” he said. 

Jaeger said 50 percent of the 948-unit complex will be restricted to people earning 80 percent of the area median income. He pointed to the housing supply constraints of the Bay Area, which is poised for “fairly dramatic rent growth” over the next 10 years, making it all the more important for those residents who qualify to live in Park Kiely for their rent restrictions to be protected going forward.  

“Being able to convert these units into something that can be more affordable for residents in those neighborhoods is hugely effective to us,” said Jaeger. “Our mission is to provide safe, clean, dignified housing for all.”

Located at 355 Kiely Boulevard, Park Kiely opened in 1971 and sits on 32 acres just six miles west of Downtown San Jose and a 15-minute drive from San Jose Mineta International Airport. The building’s amenities include a fitness center, two swimming pools, a spa, a dog park, both basketball and volleyball courts, a children’s playground, and a resident clubhouse with a business center and media center. 

Jaeger emphasized that Standard and Vistria will invest between $19 million and $20 million into Park Kieley for renovations and capital improvements. These will include maintenance and amenities upgrades as well as sustainability measures that will save more than 11 million gallons of water annually. 

An earlier version of this article incorrectly attributed the entire $410 million capitalization of the project to JLL, when the firm only provided $210 million in debt. 

Brian Pascus can be reached at bpascus@commercialobserver.com