Interstate Equities Corporation Buys 232-Unit The Dylan in Hercules for $83.5M; JLL Arranges Freddie Mac Loan
SAN FRANCISCO — Interstate Equities Corporation has acquired The Dylan, a 232-unit apartment community in Hercules, California, for $83.5 million, JLL Capital Markets announced Oct. 9. The firm said it represented the seller, Hercules Development Partners, in the sale and arranged a $54.275 million, five-year acquisition loan through Freddie Mac for the buyer.
Deal Details: The Dylan Sale and Freddie Mac Financing
The Dylan is located at 2200 John Muir Parkway in Hercules, in the San Francisco Bay Area's East Bay. The $83.5 million purchase price works out to approximately $359,914 per unit. The $54.275 million Freddie Mac loan equates to roughly 65% of the purchase price, leaving an implied equity requirement of about $29.2 million before closing costs and reserves.
JLL described the debt as long-term, fixed-rate financing. Executive Managing Director Charles Halladay said the Freddie Mac financing "provides the buyer with attractive long-term, fixed-rate debt that supports their business plan." He added: "The strong fundamentals of the asset and market enabled us to secure highly competitive loan terms for Interstate Equities Corporation."
Property Profile: A 2022-Built Waterfront Community
Completed in 2022, The Dylan is a five-story community with 217 market-rate units and 15 below-market-rate units. The unit mix includes studios, one-bedroom and two-bedroom apartments averaging 804 square feet, implying roughly 186,528 rentable square feet across the property. The community is also marketed in some rental listings as The Dylan Apartments.
On-site amenities include a lounge with a community kitchen, a sports lounge with darts, billiards and foosball, a fitness center, a resident courtyard with barbecue and fire pit areas, and bike storage with a repair station.
The property sits along San Pablo Bay with access to Interstate 80. JLL said the location connects residents to Oakland in 25 minutes, San Francisco in 35 minutes and Walnut Creek in 25 minutes. Current online listings show asking rents of approximately $2,330 to $4,060 per month, with floor plans ranging from about 496 to 1,339 square feet.
JLL Team and Market Commentary
JLL's Capital Markets Investment Sales and Advisory team representing the seller was led by Senior Managing Directors Ryan Wagner, Brandon Geraldo and Matt Kroger and Director Fatai Alashe. The Debt Advisory team representing the borrower was led by Executive Managing Director Charles Halladay and Director Matt Cimino.
"The East Bay continues to attract significant investor attention due to its relative affordability compared to core Bay Area markets, robust income growth projections and limited new supply," Wagner said. "Hercules, with its unique waterfront position and excellent regional connectivity, has emerged as a standout performer. This transaction reinforces that investors recognize the long-term value proposition of high-quality multifamily assets in this dynamic, supply-constrained market."
According to JLL, no new projects are currently under construction in Hercules.
Buyer and Broker Background
Interstate Equities Corporation has invested in, managed and transformed multifamily apartments across California and the Seattle region since 1981, according to the company. JLL reported that in the second quarter of 2026 its debt advisory business grew 44% year over year, investment sales and advisory grew 20%, and equity advisory increased 53%; those figures are company-wide and are not specific to Bay Area multifamily.
Outlook
The transaction pairs a sale of a recently completed apartment community with agency financing from Freddie Mac. The pricing, at roughly $360,000 per unit and an estimated $448 per square foot, reflects a 2022-built asset rather than a repositioning play. JLL's assessment points to the East Bay's relative affordability and limited supply pipeline as factors supporting investor interest in the submarket.
Sources
JLL, "Multifamily community in Hercules trades for $83.5M," news release dated Oct. 9, 2026: https://www.jll.com/en-us/newsroom/multifamily-community-in-hercules-trades-hands