Urban Catalyst Launches New Fund Focused on Development of San Jose Apartment Project

Aquino is a 272-unit luxury apartment project next to the site of Google’s planned Downtown West campus and within walking distance of the SAP Center and Diridon Station, one of the West Coast’s busiest transit hubs. (Photo: Business Wire)

SAN JOSE, Calif.--()--Urban Catalyst, a real estate fund manager and developer based in San Jose, California, has launched a new fund, UC Multifamily Equity I LLC (“UCME”). UCME focuses on the development of a 272-unit luxury apartment building named Aquino. Located within walking distance of Downtown San Jose’s western edge, Aquino is next to the site of Google’s planned Downtown West campus and within walking distance of the SAP Center and Diridon Station, one of the West Coast’s busiest transit hubs. The project is fully entitled and approved for multifamily construction.

Aquino will consist of studio, one-, two-, and three-bedroom units with stainless steel appliances, quartz countertops, electric ranges, and air conditioning. Residents will have access to private co-working offices, a bar and lounge, a fitness center with a yoga studio, a dog run, and a courtyard with an outdoor kitchen.

Historically, multifamily demand has vastly exceeded supply in the San Jose metropolitan area, putting upward pressure on rents and keeping the occupancy rate high. Due to the highly restrictive development policies throughout California, the San Jose metro’s 2023 multifamily construction pipeline — the number of units slated for completion by the end of this year — is smaller than 18 major U.S. metros, according to CBRE data.

The San Jose metro’s average multifamily occupancy rate was 95.7% at the end of Q1 2023, higher than the national average of 94.5%, CBRE data show. Multifamily rents in the Bay Area’s South Bay subregion, which includes the San Jose metro, are projected to increase 47% in the next decade, according to Yardi Matrix data. The South Bay’s projected rent growth exceeds that of Austin, Nashville, Phoenix, and several other major U.S. multifamily submarkets, Yardi Matrix data show.

Urban Catalyst has structured UCME as a real estate operating company, which allows it to accept funding from qualified retirement accounts such as IRAs and 401(k) plans.

About Urban Catalyst

Urban Catalyst is a real estate fund manager and developer with decades of experience doing ground-up development projects and owning and managing stabilized, income-producing assets. The company’s home market, San Jose, has the strongest job market of the U.S.’s 150 largest metropolitan areas, according to the latest U.S. News and World Report data. Additionally, U.S. News and World Report recently ranked San Jose as the country's second-best area to raise a family, behind Huntsville, Alabama.

For more information, visit urbancatalyst.com.

Important Disclosures

The contents of this communication: (i) do not constitute an offer of securities or a solicitation of an offer to buy securities, (ii) offers can be made only by the confidential Private Placement Memorandum (the “PPM”) which is available upon request, (iii) do not and cannot replace the PPM and is qualified in its entirety by the PPM, and (iv) may not be relied upon in making an investment decision related to any investment offering by an issuer, or any affiliate, or partner thereof ("Issuer").

All potential investors must read the PPM and no person may invest without acknowledging receipt and complete review of the PPM.

With respect to any performance levels outlined herein, these do not constitute a promise of performance, nor is there any assurance that the investment objectives of any program will be attained. All investments carry the risk of loss of some or all of the principal invested. Assumptions are more fully outlined in the Offering Documents/ PPM for the respective offering. Consult the PPM for investment conditions, risk factors, minimum requirements, fees and expenses and other pertinent information with respect to any investment.

These investment opportunities have not been registered under the Securities Act of 1933 and are being offered pursuant to an exemption therefrom and from applicable state securities laws. All offerings are intended only for accredited investors unless otherwise specified.

Past performance are no guarantee of future results. All information is subject to change. You should always consult a tax professional prior to investing. Investment offerings and investment decisions may only be made on the basis of a confidential private placement memorandum issued by Issuer, or one of its partner/issuers. Issuer does not warrant the accuracy or completeness of the information contained herein. Thank you for your cooperation.

Please note that this information is not specific to any individual's personal circumstances. The information provided here is general in nature and does not constitute financial, retirement, tax or investment advice. Should you desire to do a Roth Conversion, you are solely responsible for its design, implementation, management and execution and you are strongly encouraged to consult with your own tax, legal, retirement and financial advisors prior to making any decision to invest and/ or convert a traditional IRA to a Roth IRA Converting a traditional IRA to a Roth IRA is a taxable event and may have significant tax implications. Please note that future tax laws can change at any time and may impact the benefits of Roth IRAs

There are substantial risks associated with the federal income tax aspects of an investment in the Company. The income tax consequences of an investment in the Company are complex and recent tax legislation has made substantial revisions to the Code. Many of these changes affect the tax benefits generally associated with an investment in real estate. A further discussion of the tax aspects (including other tax risks) of an investment in the Company is set forth in the PPM under “Federal Income Tax Consequences.” Because the tax aspects of the Offering are complex, and certain of the tax consequences may differ depending on individual tax circumstances, prospective investors are urged to consult with and rely on their own tax advisor concerning the Offering’s tax aspects and their individual situation. No representation or warranty of any kind is made with respect to the Internal Revenue Service’s (the “IRS’s”) acceptance of the treatment of any item by the Company or an investor.

It is anticipated that if the Company generates taxable income, such income will be considered UBTI. Tax-exempt entities should consult with their own tax counsel regarding the effect of any UBTI. See the PPM and “Federal Income Tax Consequences – Investment by Qualified Plans, IRAs and Tax-Exempt Entities – Unrelated Business Taxable Income.”

Congress has recently enacted several major tax bills that substantially affect the tax treatment of real estate investments including, but not limited to, the tax provisions of the CARES Act. These changes will have a substantial effect on the type of activities in which the Company intends to engage, and certain of those effects are set forth under the appropriate subheadings under “Federal Income Tax Consequences.” In many instances, Congressional Committee reports have been relied upon for the interpretation and application of these new statutory provisions. While the Code authorizes the Treasury Department to issue extensive substantive regulations regarding recently adopted Code provisions, few have been issued to date. In addition, Congress could make substantial changes in the future to the income tax consequences with respect to an investment in the Company.

Real Estate Risk Disclosure:

  • There is no guarantee that any strategy will be successful or achieve investment objectives including, among other things, profits, distributions, tax benefits, exit strategy, etc.;
  • Potential for property value loss – All real estate investments have the potential to lose value during the life of the investments;
  • Change of tax status – The income stream and depreciation schedule for any investment property may affect the property owner’s income bracket and/or tax status. An unfavorable tax ruling may cancel deferral of capital gains and result in immediate tax liabilities;
  • Potential for foreclosure – All financed real estate investments have potential for foreclosure;
  • Illiquidity – These assets are commonly offered through private placement offerings and are illiquid securities. There is no secondary market for these investments;
  • Reduction or Elimination of Monthly Cash Flow Distributions – Like any investment in real estate, if a property unexpectedly loses tenants or sustains substantial damage, there is potential for suspension of cash flow distributions;
  • Impact of fees/expenses – Costs associated with the transaction may impact investors’ returns and may outweigh the tax benefits;
  • Stated tax benefits – Any stated tax benefits are not guaranteed and are subject to changes in the tax code. Speak to your tax professional prior to investing.



Morgan Bernardis
Urban Catalyst

Release Summary

UCME, Urban Catalyst's latest fund, focuses on the development of a 272-unit luxury apartment building near Downtown San Jose named Aquino.

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Morgan Bernardis
Urban Catalyst