Deal points to hot market

Terra House property sold to Chicago investors

SAN JOSE >> A huge apartment complex in San Jose has been bought by investors affiliated with a financial services giant in a deal that points to a still-hot Silicon Valley residential and commercial property market.

Terra House, an apartment complex next to a Safeway-anchored shopping center near the corner of Snell Avenue and Branham Lane, has been bought by affiliates of the real estate arm of Teachers Insurance and Annuity Association of America and a Chicagobased TIAA unit called Nuveen.

The 340-unit Terra House apartment complex, previously known as Avana Skyway, was bought Nov. 18, according to documents on file with Santa Clara County officials.

TREA Terra House, a Chicago-based affiliate of Teachers Insurance and Annuity, paid $145.2 million in cash for the apartments, the county property records show.

The recent price paid by TREA, which is shorthand for Teachers Real Estate Account, represents a solid increase in profit for the Terra House complex when compared with the increase in the Bay Area inflation rate.

The apartment center last had changed hands in 2015, trading for $124.3 million, this news organization’s survey of property records determined.

The Teachers Insurance purchase price on Nov. 18 for Terra House

represents a 17% jump from the 2015 transaction value. During the same four-year period, the overall inflation rate in the Bay Area rose 14 percent, figures from the U.S. Bureau of Labor Statistics show.

“This deal shows there is strong investor interest and demand for residential properties in Silicon Valley and interest in developing these kinds of projects,” said Erik Hallgrimson, vice chairman with Cushman & Wakefield, a commercial real estate firm.