San Francisco Apartment Buildings – Market Update Q4 2014

SF Apartment Buildings 2014 Overview

As we close up the first whole month of 2015, we wanted to take the data that we’ve gathered from the past year and give you a complete market overview for San Francisco Apartment Buildings.

As we forge through 2015, barring any unforeseen catastrophic events or any major economic changes, we believe the apartment market will continue advancing with positive momentum. The lending market is contributing to this positive trend by boasting much liquidity in the marketplace and providing borrowers with historic low interest rates.

The average price per square foot for all 5+ unit apartment buildings in SF is well over $400 and is expected to continue to rise. The rise is largely due to low-paying tenants moving out and market rental prices hitting all time highs.

*Because of the huge variety in buildings sold, average dollar per square foot is a very general statistic when applied to investment property sales. This data is from sales reported to MLS.

In San Francisco, capitalization rates for 5+ unit apartment buildings have continued to drop, in some areas below 4%. While we don’t know how much lower they can go, we do foresee cap rates staying steady until there is a rise in interest rates.

The higher the cap rate the greater the return on investment as measured by net income over purchase price.

* This data is from sales reported to MLS, but may contain errors and is subject to revision.

San Francisco has continued to have steady transaction volume in apartment building sales and with Proposition G being shot down late last year, buildings continue to close at record numbers.

If you are a San Francisco Apartment owner thinking about selling sometime in 2015, contact Red Bridge Group, your top multi-unit sales specialists.