Petaluma's Theatre Square Apartments, built in 2005 as part of downtown's revitalization, have been sold to a San Mateo real estate investment firm for $32.5 million.
JB Matteson Inc. is acquiring the mixed-use development, which includes two buildings on Second Street that house apartments, a riverside restaurant and offices.
The apartments were built by Basin Street Properties as part of the broader downtown Theatre District redevelopment project. They are part of a three-story development that includes 99 apartments, 43 of which are loft-style, and 22,250 square feet of ground-level commercial space occupied by Graffiti restaurant and three office tenants.
The properties are at 151 Petaluma Boulevard South and 101 Second St. The ground-floor retail space on the Petaluma Boulevard building is separately owned.
The buildings weren't actively on the market, though they were in 2012, said Seth Siegel of Cushman & Wakefield, who represented Basin Street in the transaction.
"Matteson came along and made them an offer they couldn't refuse so they took it," he said.
The deal is JB Matteson's eighth recent acquisition in California. It recently bought two properties in Marin County, in San Rafael and Novato.
"Together with Rafael Town Center and Millworks, we now have a significant assemblage of Class A urban apartment properties north of the Golden Gate Bridge," John Bellack, president of JB Matteson, said in a statement announcing the deal.
"Like our other recent North Bay acquisitions, Theatre Square Apartments appeals to the lifestyle renters who enjoy walkable downtown amenities and transportation options."
The apartments are at Petaluma Boulevard and Second Street, just steps away from downtown restaurants, bars, theaters, shops and the Petaluma River. It is also close to office space, Walnut Park and Highway 101 access.
Matteson called the area "a centerpiece in one of the most appealing districts along the suburban Marin/Sonoma Highway 101 corridor."
Siegel said Matteson, a privately held company, was attracted to the property's location, quality construction and relative newness.
"They understand the market well. They have a history of buying best-of-class products," he said. "That really is one of the best properties up there. It is very well-located."
Theatre Square Apartments include "junior" one-bedroom apartments of about 600 square feet that rent for $1,600 a month to three-bedroom, two-bath residences priced at $2,400 monthly. The loft-style units have high ceilings, finished concrete floors, track lighting and large windows that create an industrial look.
JB Matteson Inc. is part of The Matteson Companies, which was born in 1964 when Duncan L. Matteson started acquiring, developing, and managing Bay Area real estate. Today it is involved with multifamily real estate acquisition and investment throughout the western United States.
The company manages a portfolio valued at about $1 billion that includes multifamily residential, office, retail and mixed-use property types in California, Arizona, Oregon and Washington.