Alamo Square Trophy Property is San Francisco’s Biggest Multifamily Deal of 2022

A renovated 1920s-era apartment building with postcard views of Alamo Square has sold for a bit more than $18 million.

That is by far the priciest trade for a San Francisco market-rate multifamily building so far this year, and may portend more big sales to come as several other century-old apartment towers are pending sale amid a rental market comeback.

The 42-unit property at 625 Scott Street came to market in April asking $20 million and had four offers, according to listing agent Allison Chapleau of Vanguard Commercial, who co-listed with Brad Lagomarsino of Colliers International.

The winning bid of about $600 per square foot and $430,000 per unit was not the highest offer, she said. But it had the best terms for the longtime owner, Delta Group, a collection of investors who do not own any other buildings together and are approaching retirement age.

The new owner is officially named 625 Scott Street LLC, according to public records. Chapleau called the buyer a “local investor” with other properties in San Francisco and the popular NoPa neighborhood. He was willing to waive inspections and agreed to a 30-day close, said Chapleau, who represented both sides of the deal. It went into contract in May but the close was extended to Aug. 1 to account for vacation and travel schedules, she said.

With just over 30,000 square feet, 625 Scott Street was also the largest apartment building for sale in the city and its sale may kick off a slew of deals for longtime multifamily owners looking to exit now that rents are back up to near pre-pandemic levels. The owners of 901 Pine Street, a 29,610-square-foot 36-unit apartment building across from the Mark Hopkins Hotel on Nob Hill, had held the 1908 property for 25 years before listing in April, according to its listing notes. It went into contract in May with an asking price just under $17 million. On June 1, the 25,000-square-foot view property at 899 Green Street in Russian Hill, held by the same family for generations, also came to market with an asking price of $15.5 million. The 38-unit 1923 corner property was in contract three weeks later.

Affordable housing rental complexes have also changed hands this year. SoCal investor Avanath Capital spent $96 million on the 3.6-acre Crescent Cove development next to Caltrain in May. Its 236 units are available to those who make up to 60 percent of the area median income.

Chapleau said “really strong rents” are having a big impact on the market. In July, Zumper data showed that the city had broken the $3,000-a-month mark for the first time since before the pandemic, and certain San Francisco neighborhoods are even able to bring in rents higher than in 2019.