Red Bridge Group

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.

Earthquake Preparedness with Ready SF’s David Yacubian

Last Thursday here at Pacific Union | Noe Valley we were honored to welcome locally based Haight-Ashbury company, Ready SF and David Yacubian for an informative seminar on Earthquake Preparedness in The Bay Area – and San Francisco in particular.

David is no stranger to Earthquakes – in fact, he is more qualified than most – having experienced first hand a massive quake while living with his family in New Zealand. Click here to read more about David Yacubian’s story.

As our team gears up for our grand opening of the first ever Pacific Union | Noe Valley office, we wanted to differentiate ourselves from the pack – and avoid the pitfalls of most real estate companies. We are going to be different – and part of this difference will involve a strong involvement in our Noe Valley community. This past Thursday’s seminar at our brand new office at 1400 Castro Street in Noe Valley – was just one of many community related events we have planned. With David’s support, and the support of our greater Noe Valley neighborhood – our next event will be CPR training related. So stay tuned!

The Ready SF seminar was only about 30 minutes – but in that time, David dispelled many of the myths about what one should do in the event of a quake. He is of the belief that having an “Earthquake Kit” is not enough. We live very active lives here in San Francisco – and it is the unusual time when our families are all together – at home. Our children are at school, we are at work, and Mother Nature doesn’t time earthquakes to best suit our needs – they can strike anytime.

David wants us all to know – it is more about your family’s “plan of action” than a kit. And with the 25th anniversary of the devastating Loma Prieta Quake of 89, it is important we all remember just how serious earthquake threats are here in The Bay. We must remain steadfast in our preparedness for the next shake. David is a DIY kind of guy – and recommends that your “Earthquake Kit” be created by you and for you – every family needs different items so avoid a standardized kit and spend a Sunday afternoon creating a kit based on the below information!

Here are some notes from Thursday’s seminar:

  1. Cash is King – when electricity goes out, that means no ATM or credit card scanners at Walgreens. There is no set amount David recommends, but he does suggest keeping an amount on hand (in small denominations – again, no change drawers will be opening with no power).
  2. Have a Plan
  3. Texting Works much better than Calling (interesting point! – SMS will continually try to “get through” while during such a chaotic event likely will not work. Just let someone know that you are alright – even if it takes a few hours to send, your loved ones will be happy to know you are safe. Having someone out of state to text is something to incorporate into your plan – with everyone in San Francisco trying to text at the same time, texts leaving the state often avoid the signal traffic happening in SF proper).
  4. Always keep your gas tank 1/2 full! It could make the difference between getting somewhere safe outside of the city quickly – or waiting in gas lines for hours/days. (Yes, always – your family will appreciate this anyway – earthquake or not!).
  5. Get training – First Aid or otherwise. Check out some of Ready SF courses for more info.
  6. Keep good Hygiene. Water is gold. Potable water can be found in your water heater in a pinch – or the back of a toilet (no, not the bowl!). David recommends hand sanitizer to save your precious water supply.
  7. Expect 72 hours with no help from the city – this is unlikely, but be prepared with a 3 day water supply – and whatever other items (ie. medicine, toys, blankets, flashlights, batteries, radio…).
  8. Know how to use the tools you have. And know what tools your neighbors have! Create a mutual plan – trading and bartering will become common means of “getting by” during an earthquake. Band together with those around you!
  9. Only turn off your gas line if you smell gas. No need to turn it off preemptively because it will take days to get it back on. Use common sense here. Heat helps create potable water, among other things – so use your head and don’t hit the emergency gas shut off unless it is necessary.

Other items to consider – being well prepared involves:

  1. Secure your Home. Valuable items that can fall – can be secured with a putty found at hardware stores.
  2. Make a Plan – and rehearse it. Just like a fire drill. Have the kids play along – as if they were by themselves. Show them what to do – and what not to do.
  3. Make a Kit – using items mentioned above – as well as items specific to your needs. Make sure you have an extra supply of medicine. Many online pharmacies now offer a 90 day supply – for those with conditions requiring daily dosing of medication, this is a MUST.
  4. Stay Inside during a quake!

Finally, we must accept there are many unknowns. We can not prevent an earthquake or control Mother Nature. However, David Yacubian and Ready SF can help you be as prepared as possible. With preparedness comes a level of serenity and comfort – knowing that you have done everything possible to protect your family in the likely event of another Earthquake.

-Andrew Salkin, Operations at Pacific Union | Noe Valley

Please call or email us at 415-997-9964 for more information on Earthquake Preparedness or Real Estate in San Francisco. We would love to hear from you.