Newport Beach-based Waterford Property Co. and the California Statewide Communities Development Authority have acquired a multifamily property in Pasadena for $67 million from Summerhill Communities.

The 105-unit property, dubbed the THEO, is at 289 N. El Molino Ave. Institutional Property Advisors’ Kevin Green and Gregory Harris represented Waterford in the transaction.

Waterford is serving as project administrator for the property, where it will lower rents for residents making between 60% to 120% of the area median income.

Rent at the property currently averages $3,562 a unit. Under the new rent restrictions, rent will be $2,860 a month instead. Rent increases will be capped at 4% annually.

“The San Gabriel Valley multifamily market is experiencing record low vacancy rates at 1.7 percent,” John Drachman, co-founder of Waterford, said in a statement. “This allows landlords to dramatically increase their market rents. By reducing rents for essential workers, we are providing a solution to the challenges many renters are and will be facing.” 

In the last two years, groups including the California Statewide Communities Development Authority, have started new workforce housing initiatives. The programs work with companies like Waterford and cities to purchase market-rate buildings and then reduce rents.

Tax exempt bonds are used to finance the acquisitions, which are also exempt from property taxes since they are not held privately.

“This is more than a real estate transaction,” Sean Rawson, co-founder of Waterford, said in a statement. “This program benefits people. It provides a vehicle to make housing in California more affordable while providing residents a chance to experience real savings. We believe this program will help our essential workers, such as medical workers, teachers, and service professionals, remain in the cities where they work.” 

Waterford has been especially busy in Pasadena where it has now acquired three properties. In Southern California, it has 10 communities that have been converted from market-rate housing to essential housing.