An apartment in Walnut Creek has sold for the highest per-unit price in the East Bay this year, according to Tim Warren with brokerage NAI Norcal. San Francisco-based Rockwood Capital acquired the Arroyo Residences for $66 million, or $660,000 per unit, according to public records.
Warren, who is not associated with this deal, specializes in multifamily acquisitions in the East Bay and said “the price is high because it’s a new construction and the units are big.”
The property at 1250 Arroyo Way was sold by Wisconsin-based Northwestern Mutual Real Estate. Northwestern acquired the property for $37.8 million in 2015 while it was still under construction.
The complex features 100 units of one- and two-bedroom apartments, with the one-bedroom units almost spanning 900 square feet. According to Apartments.com, rents at Arroyo range between $3,341 and $3,816. Amenities include a pool, spa, business center, clubhouse and a rooftop terrace.
Walnut Creek is seeing a strong multifamily market coming out of Labor Day. According to Zumper, average rent in the East Bay suburb is $2,600, an 11 percent increase from this time last year. Arroyo is well above the average rent of the downtown area of $2,825. Walnut Creek also has a demand-supply imbalance for apartments, with only 37 units available to rent.
Also, Walnut Creek is outperforming the average of the East Bay, according to a report by Cushman & Wakefield. Average rents hit $2,197 per unit in the second quarter, up 6 percent from a year earlier. East Bay Rents vacancies are dropping, too, finishing the quarter at 5.2 percent, compared to 7.4 percent a year earlier. A majority of new construction are luxury apartments, which will keep rents elevated.
“Even with the significant construction pipeline, effective rents are likely to remain elevated as most of those deliveries will be in the more expensive markets and within trophy assets,” the report said.
In January, Opportunity Housing Group and the California Statewide Communities Development Authority bought the 484-unit Wood Creek Apartments in Pleasanton Hill for $304 million, or $628,000 per unit.
More recent East Bay deals have closed for hundreds of thousands of dollars less per unit than the Arroyo deal. Novin Development acquired a Pleasant Hill building for $326,000 per unit with plans to provide affordable housing to residents. A 51-unit multifamily property in Hayward is currently on the market seeking $500,000 per unit. In a sign that the suburbs are holding up better than the urban cities, a downtown Oakland apartment building fetched a little under $200,000 earlier this summer.
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East Bay apartment complex sells for $304M, to be converted into ‘missing middle’ housing