SF, SJ lone markets in U.S. to lag pre-pandemic mark on resi rents

Double digit gains since first quarter of 2021 pale compared to other locales that roared back

Illustration of an apartment and hand holding a penny
(iStock, Illustration by The Real Deal)

San Francisco and San Jose are the only markets throughout the U.S. that have yet to climb back to pre-pandemic levels on rent, according to a recent CBRE report that tracked 69 metro areas nationwide.

Average rents in San Francisco are still 10 percent lower than they were at the beginning of 2020. San Jose rents trail the pre-pandemic averages despite recent hikes. The average rent rose 14.1 percent over the 12 months from the first quarter of 2021. San Jose rents notched a 13.3 percent gain, while Oakland saw 10.3% gain.

The numbers pale in comparison with markets that have roared back from the doldrums of the pandemic. West Palm Beach in Florida claimed the top spot for increases in the CBRE report with a 30 percent jump, with Phoenix up 26 percent, and Orange County leading California at 18 percent.

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None of the three most populous cities in the Bay Area saw enough multifamily investment to land among the top 20 markets listed by CBRE. The Dallas-Ft. Worth metro area topped the list for investments at $29 billion over the 12-month period. List cut off at Nashville, which drew $5.3 billion.

Los Angeles ranked fourth in the nation on investments $18.6 billion, according to the CBRE report. That’s about 5 percent of total multifamily investment in the U.S. over the last year, and fourth highest in the nation.

Propelled by a market with low interest rates and high rent growth, investors spent $374 billion on multifamily properties across the U.S. over the last year — triple what they spent from March 2020 through March 2021.

It was officially the most popular commercial real estate class across the U.S., making up 37 percent of all investments in the first quarter, according to the report. Office properties drew about 20 percent of the total over the same period.