[caption id="attachment_89537" align="alignleft" width="179"] Katherine Higgins[/caption]
The Marin County apartment market continued to strongly favor sellers in 2013, with high prices per unit and capitalization rates as low as 4 percent in many locations.
Buyers discovered that there was a big spread between existing rents at properties and current market rents-some upside as high as 30 percent -- and continued to seek Marin rental properties.
Coupled with the low inventory, prices are now at peak levels of 2005--2007, with multiple offers on many properties. In the two- to four-unit category, inventory remains at record lows, and prices in Southern Marin are commanding as much as $425,000 per unit.
The highest four-unit price in 2013 was in Sausalito, with a four-unit building on San Carlos selling with multiple offers for $1.7 million. In San Rafael, the biggest fourplex sale was Gerstle Park, which sold for $1.28 million for a nicely located property on C Street.
Most San Rafael fourplexes were trading at $750,000--$950,000 in 2013. Duplex prices continued to increase and have moved from lows of the past two years to over $780,000. Those prices should continue to move up as entry level home prices move up and squeeze buyers out of the residential housing market.Number of large sales
In the five-unit-plus category of multifamily, a number of large sales occurred. The 284-unit luxury apartment complex at The Cove in Tiburon sold for $138 million to a Boston investment group. The cap rate was only 3.75 percent, but investors were attracted to the 30 percent upside in rent for this prime waterfront apartment investment.
Rents in southern Marin are now up to $2,500 a month for one-bedroom apartments and approaching $3,000 for two bedrooms. Many owners who have not kept up with the rental market are sitting on one-bedroom units that were renting for $1,800 just 18 months ago and are now $2,500.
In central Marin several large apartment sales included 48 units in Fairfax that sold for $10,250,000 after just one week on the market. Sixteen units at 1135 Grand Ave. in San Rafael closed for $3 million or $187,500 per unit. In the fall, a seven-unit property at the top of Bon Air Hill in Greenbrae sold for $2.275 million after only 35 days on the market.
Only a handful of properties in the five-unit-plus category sold for under $2 million, including seven units at 29 Belle Ave. in downtown San Anselmo. Five units at 10 Ashe Ave. in Fairfax that sold for $1.2 million, which at 6 percent had the best cap rate of the fewer-unit properties.
Investors can expect to see a continuing strong sellers' market in 2014 as inventory remains tight and many units are selling off market right now. If you are thinking of selling or trading up to a larger property it is an excellent time to consider selling or exchanging. If you are buying let me help you find an off market property to purchase....
Katherine J. Higgins, broker associate, Bradley Real Estate, Inc., San Rafael, specializes in the sales of multifamily apartment properties in Marin County.
