KP International Market owner pivoting into apartment investments with two local purchases

The owner of one of the better-known ethnic grocery stories in the region is moving into multifamily real estate.

The Oakland-based owner of KP International Market bought two Sacramento-area properties in recent weeks for $18.25 million combined.

“The buyer had cash reserves in the bank that he wanted to place in stable real estate assets for better long-term appreciation and likes multifamily to fit that bill, given their traditional high occupancy rates and rental rate growth over time,” said Race Merritt, a broker with Ethan Conrad Properties Inc. who worked on the buyer’s behalf for both sales.

Under the name 2405WAL LLC, the buyer paid $12.25 million for 66-unit The Grove, at 2405 Walnut Ave. in Carmichael. The purchase price works out to about $185,600 per unit. Separately, the same buyer bought 27-unit Peacock Garden, at 2125 Fair Oaks Blvd. in Arden-Arcade for $6 million.

Merritt said in an email that the new owner will renovate units in both properties that still need upgrades, and adjust rents accordingly. The owner is also closing escrow on a multifamily property in Concord but is otherwise done with such investments for now, Merritt said.

Tony DeLoney of The DeLoney Group with real estate brokerage Marcus & Millichap said the previous owner of The Grove bought the property three years ago and has made extensive interior and exterior improvements. Records show the seller as MJD JCRE 2404 Walnut Ave Multifamily Owner. A message left with the seller was not returned.

That entity paid $8.25 million for The Grove in 2018, records show. The newer sale was the 15th multifamily sale The DeLoney Group has closed this year, according to DeLoney.

Peacock Garden, sold for about $222,000 a unit, was sold by Swanston Properties Inc. and BKJ Holdings Inc., with a Sacramento address.

North Coast Commercial Inc.’s Tim Swanston, who was part of the seller’s side, said Peacock Garden was fully occupied at the time of sale.

“However, right before closing a vacancy was filled at $150 more than any other rent,” Swanston said in an email. “The rental market is still moving higher because of lack of vacancy as well as inflation.”

-Ben van der Meer Staff Writer Sacramento Business Journal