Century-old apartment complex in Oakland asks $30M
Multifamily with 118 units comes with entitlements for further development
A 100-year-old multifamily building in Oakland has hit the market for $30 million, according to a marketing brochure by Corcoran Icon Properties.
Davis-Coit Apartments, located at 1445 Harrison Street, has 118 housing units and was built in 1925. The building spans 55,000 square feet and is located by Oakland’s Central Business District and Lake Merritt. When the property was built in 1925, it was a hospitality space named the Coit Hotel. It was remodeled into apartments in 1997.
The $30 million asking price, or $534 per square foot, is based on the $23.8 million sale of the apartment building and a $6 million sale of the entitled lot. The parcel could potentially be subdivided with a lot line adjustment and approved for a 127-unit development. The asset should hold up against economic uncertainty, according to Guiseppe Zumbo, the broker who has the listing on the property.
“It’s a hedge against inflation,” Zumbo told TRD. “Most of this is subsidized housing and partially exempt from rent control.”
In June of 2020, property owner Oakland Affordable Housing Group took out a $10.7 million loan from San Francisco-based First Republic on the property.
First Republic was recently acquired by JPMorgan Chase after it was seized by the California Department of Financial Protection and Innovation. The San Francisco-based bank was the top lender for many local multifamily owners, and local investors are wary of industry lending practices moving forward.
“The way that Jim Herbert did it is going away,” David Wasserman, landlord attorney and multifamily owner said, referencing the long-standing relationships held by First Republic’s founder and former CEO.
The Oakland multifamily market saw mixed results in the second quarter, according to a new report by brokerage Marcus & Millichap. The vacancy rate grew to 5.2 percent from 2.8 percent during the same quarter a year ago, the second-largest annual increase in two decades. However, rents also increased from the previous year by 13 percent, and now stand at $2,610 per month. Investors are bullish on the market in the coming years.
“The metro’s population is projected to increase by nearly 60,000 in the next five years, outpacing all other Bay Area markets,” the report said. “Many of these new residents will be steered toward rentals, as the mortgage payment on a median priced home eclipses the average apartment rent by more than $4,000.”
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