Two San Francisco-based multifamily investors and a Carlsbad-based owner-manager have been busy buying up Marin multifamily properties this summer.
Rents in the affluent North Bay county have increased steadily during the pandemic and eviction moratoriums are set to sunset this month.
On August 8, San Francisco-based Sack Properties expanded its North Bay footprint with the $58 million purchase of the Lofts at Albert Park from Bel Albert Holdings, according to The Registry. It already owns a 47-unit complex in Novato, as well as several other properties further north in Sonoma, according to the Sack Properties website.
It has rebranded the complex as One55 Lofts, and is asking $2,400 a month for its 300 square foot studios up to $6,100 for a two-bedroom, one bath. It paid $460,000 per unit for the 126-unit, five-story complex built in 2001.
A few days later, Tottenham Investments sold its waterfront Portofino Riviera apartments to Sausalito Evergreen SPE, LLC, according to property records, which has the same address as North Coast Living, a Carlsbad-based multifamily owner operator with apartment communities up and down the West Coast. It already had holdings in the East Bay and on the Peninsula but this is its first buy in the North Bay.
The 40-unit complex went for $20 million or $500,000 per unit. It has a mix of studios, one-bedrooms and two-bedrooms in its pet-friendly community in downtown Sausalito, as well as a pool and courtyard for residents. It currently has nine available units ranging from $1,850 for a studio to $5,400 for a two-bedroom.
Tesseract Capital Group also placed its bets on the continued desirability of waterfront living, buying the 400 Canal Street Apartments on the San Rafael Creek for just over $32 million, according to property records, by far the least expensive price per unit of the big summer sales with a cost of about $325,000 for each of its 99 units.
The San Francisco-based multifamily investor has four apartment buildings in the city, plus about a dozen more throughout the East Bay, but this is its first foray into the North Bay. It went into contract on the 1964 property in May and worked with KeyBank Real Estate Capital and JLL Capital Markets to complete the transaction in July, according to a press release. The seller was 400 Canal Street LLC, which is based in Santa Rosa and has owned the property over a decade.
Marin’s rents have gone up steadily over the past two years as increased indoor and outdoor space became more desirable during the pandemic, rising 6% during 2021, according to CoStar.
Rents are up substantially for some of the county’s southern cities. One-bedroom San Rafael rents are nearly one-third higher year-over-year in September, with a median rent of about $2,500, according to Zumper data. The vacancy rate is less than 3%, the lowest in a decade.
The county also does not have the same strict rent control measures that can make owning multifamily properties an onerous proposition in San Francisco, Oakland, Berkeley and San Jose. Under state law, rents cannot be raised more than 5% plus local inflation, and they can never exceed 10%.
In Larkspur, where San Francisco-based Prime Group bought the 455-unit Skylark Apartments for $300 million in February, an 8.8% annual increase is the maximum allowed, compared to only 2.3% in San Francisco. The San Francisco-based investment group imposed the 8.8% maximum increase on its Larkspur renters shortly after closing on the property, according to the Marin Independent Journal.
Marin has extended its eviction moratorium several times, but it is set to lapse at the end of this month, though some cities could choose to re-extend. The county, which administers rental relief funds, had not distributed nearly $8.6 million of the $36.4 million it received from state and federal agencies in August, though it planned to do so by the time the moratorium expires, according to the Mercury News.
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