San Rafael – The Marin County apartment market continued to strongly favor sellers in 2013, with high prices per unit and cap rates as low as 4% in many locations. Buyer’s discovered that there was a big spread between existing rents at properties and current market rents-some upside as high as 30%-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 2-4 unit categories, inventory remains at record lows, and prices in Southern Marin are commanding as much as $425,000 per unit.

The highest 4 unit price in 2013 was in Sausalito, with a 4 unit building on San Carlos selling with multiple offers for $1,700,000. In San Rafael, the highest 4 plex sale was in Gerstle Park, which sold for $1,280,000 for a nicely located property on C Street.

Most San Rafael 4 plexes were trading between $750-950,000 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.

In the 5+ categories of multifamily, a number of large sales occurred, with the 284 unit luxury apartment complex at the Cove in Tiburon selling for $138 million to a Boston investment group. The cap rate was only 3.75% but investors were attracted to the 30% upside in rent for this prime waterfront apartment investment.

Rents in Southern Marin are now up to $2,500 for one bedroom apartments and two bedroom units approaching $3,000 per month. Many owners who have not kept up with the rental market are sitting on one bedroom apartments that were renting for $1,800 just 18 months ago and are now at market at $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 Avenue in San Rafael closed for $3,000,000 or $187,500 per unit. In the fall, a 7 unit property at the top of Bon Air Hill in Greenbrae sold for $2,275,000 after only 35 days on the market.

Only a handful of properties in the 5+ category sold for under $2,000,000 and included 7 units at 29 Belle Avenue in downtown San Anselmo and five units at 10 Ashe Avenue in Fairfax that sold for $1,200,000. This was the best cap rate of the smaller units at 6%.

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.

Give me a call at 415-302-7730 to discuss your investment plans and I would be happy to advise you.

Yours very truly,
Katherine J. Higgins
Investment Broker

See our recent sales below:

  • The Alpine Building, mixed use landmark building at the corner of Bolinas and Broadway, Fairfax. Sold for: $2,030,000
  • 69 Broadway Fairfax Mixed use Fairfax – 3 apartments and 2 retail tenants, parking in rear. Sold for $1 million cash, multiple offers received. Sold for: $1,000,000
  • 111 Clayton San Rafael Totally remodeled triplex. Sold for: $950,000