Turton Marketing Midtown Site Entitled by D&S Development for Nearly 300 Units

A Midtown Sacramento site with entitlements for nearly 300 apartments is on the market.

Turton Commercial Real Estate is marketing the 32,000-square-foot site on the northeast corner of K and 21st streets under the name “21K.”

“We just love the location,” said Scott Kingston, a senior vice president at Turton who’s on the listing. “You just don’t have a ‘Main and Main’ too often, with walkability to all the amenities Midtown has.”

The addresses in the listing are 1020 21st St., and 2015 and 2025 K St., which have one commercial building on them and are otherwise mostly parking.

Three years ago, current owner D&S Development got entitlements for a project on the site of 296 apartments with 8,000 square feet of ground-floor retail space, in an eight-story building.

Kingston said the site is being marketed to a number of potential groups, including market-rate apartment developers, affordable housing developers and senior housing developers.

“We try to get creative on finding a potential buyer and developer,” he said, adding the existing parking on the property generates about $16,000 of monthly income. D&S Development bought the properties included in the listing for about $4.46 million combined.

Though the site and its entitlements have been on the market for a while, Turton Commercial recently began marketing it with a new price of $5.6 million, down from $6.4 million previously.

D&S Development didn’t return an email seeking comment on why the company is ready to move on from the project. Kingston said he couldn’t comment on the company’s motivations, but said if the brokerage can find a buyer at or near the listed price, his sense is D&S would be happy to focus on other projects.

Based on city approval of the project in summer 2022, a new owner would need to work on getting an extension in short order, given the typical three years such entitlements remain in effect.

Kingston said with relatively few apartment projects in the pipeline for construction in the urban core, the next owner for 21K could line up nicely to take advantage of a market that’ll have more demand than supply for urban housing in a few years.

“Projects, for the right one, are starting to work again,” he said, describing recent progress he’s seen in interest rates and construction costs coming down or flattening. Capital markets to finance a project’s construction, with only a single-digit percentage return in the end for the developer, are where the challenge remains, he said.

In addition to Kingston, Ken Turton and Kimio Bazett of Turton Commercial are on the listing.