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The Colliers Sacramento Multifamily Team has completed the $16 million sale of 2850 Cottage Way, a 100-unit apartment property in Sacramento. The asset traded at a 6.53% cap rate, with Colliers representing the buyer in the transaction. The sale involved an investor executing a 1031 exchange, adding timing and underwriting complexity to the process.
According to the Colliers team of EVP Aaron Frederick, SVP Matt Sarro and associate George Melski, this was their second engagement with the same investor on an acquisition in the Sacramento multifamily market. The buyer approached them with an active 1031 exchange and a need to source a suitable replacement property. Colliers was already in discussions with the ownership family of the Cottage Way property when one of the family members opted to list the complex with a different broker just before it was set to come to market.
Colliers maintained a strong working relationship with the newly selected listing agent, which enabled the parties to move ahead with a collaborative approach. The listing broker represented the seller, while the Colliers team continued to advocate for its buyer client. That structure allowed the deal to proceed despite the shift in listing representation and the added coordination required between brokerage teams.
During early due diligence, the Colliers team identified that the seller had been self-managing the asset and was expensing a wide range of costs directly through the property’s profit and loss statement. This approach resulted in an artificially low reported net operating income. To address the discrepancy, the team rebuilt the financials by closely analyzing rental income and applying expense assumptions derived from comparable multifamily properties they knew well in the area. This underwriting work was critical for the buyer’s investment analysis and for positioning the deal with lenders.
When the transaction was submitted to the bank, the lender based its underwritten loan proceeds on the seller’s reported financials rather than the reconstructed figures, which materially reduced the available loan amount. To keep the deal viable within the lender’s loan-to-value constraints, Colliers and its client sought an immediate price reduction. As physical inspections advanced, the discovery of deferred maintenance at the property triggered additional requests for concessions from the seller.
Despite these challenges, including multiple points at which the parties believed the transaction might collapse, Colliers and the involved stakeholders worked through each issue to reach closing. The team cited the combination of an existing relationship with the investor, strong rapport with the listing broker, and detailed financial re-underwriting as key factors in successfully completing the Sacramento apartment sale.
The post Colliers Sacramento Multifamily Team Closes $16M Sale of 100-Unit 2850 Cottage Way Apartments appeared first on CRE Market Beat.
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