In a joint venture with Capmark Financial, Pacific paid $96.6M on a combined basis for the two adjacent properties and plans to inject additional capital into the projects as part of a planned repositioning. The properties will be managed as one asset out of a new centralized leasing office and will be renamed Waterstone San Jose.

Pacific's Acquisitions Manager, Eric Schrumpf, highlighted the firm's interest in the properties, "Through the acquisition of Capitol Village and Ellmar Oaks, we have added a pair of well located and high quality assets to our steadily growing Bay Area portfolio. In addition to the economies of scale anticipated from running the two adjacent complexes as one larger community, we believe that these assets are poised for dramatic rent growth in the near term. Rents at both properties have historically lagged those of the competition in the immediate submarket and we anticipate that the planned renovation program will enable us to narrow the gap in rents relative to the newer properties in the neighborhood."

Capitol Village was constructed in 1986 and Ellmar Oaks was constructed in 1988. The properties are immediately adjacent to each other and are located less than one mile to the east of the intersection of Highway 87 and Capitol Expressway, a major traffic arterial spanning much of south and eastern San Jose. The properties are five miles from the heart of downtown San Jose and less than a mile from a VTA light rail station linking the submarket to the broader Bay Area public transportation infrastructure.

The properties feature extensive and mature landscaping and benefit from numerous water features which run throughout both properties providing for premium views from many of the units. Units at the properties come with in-unit washer/dryers, air conditioning, large balconies/patios, and private secured garages. Common area amenities include swimming pools, spas and a fitness center. FPI Management Inc. will manage the properties for Pacific.

The acquisition of Capitol Village and Ellmar Oaks represents Pacific's sixth major acquisition in the San Francisco Bay Area since the spring of 2005 and is further evidence that Pacific continues to be a major player in its home market. Most recently, Pacific closed on the 118-unit Forest Towers in downtown Palo Alto in the summer of 2006.

The transaction was brokered by Stan Jones and Phil Saglimbeni of Marcus and Millichap's Palo Alto office. TCI Properties provided additional assistance to Pacific in the transaction.

Pacific Property Company is a privately owned multifamily investment company seeking to acquire attractive apartment investment opportunities throughout the West Coast, with a focus on California, Washington, and Washington DC.

For further regional contact information and broker/owner submittals, contact:

Los Angeles County/Ventura County:
Steve Weilbach
Managing Director
650/842-2324

Orange County/San Diego County/Inland Empire:
Aaron Hancock
Acquisitions Manager
949/757-0428

Northern California:
Eric Schrumpf
Acquisitions Manager
650/842-2328

Pacific Northwest:
Jesse Mack
Acquisitions Manager
206/357-8444