Marin Apartment Rents Continue to Soften; Apartment Sales Still Strong

San Rafael—Marin County apartment rents continued to soften in the first quarter 2017 with many available apartments sitting on the market for up to 30 days. Part of this can be attributed to the severe winter weather in January and February which reduced immediate demand from new tenants.

At the same time, landlords found asking rents were being challenged by potential tenants with more negotiating going on between landlord and tenant to determine the final contract rent. Many owners reported that they had to reduce rents by a small percentage with the most recent apartment turnovers since there was more competition from other properties nearby.

In Southern Marin rental properties are competing with both San Francisco rentals, which are softening now, and more centrally located apartments in San Rafael and San Anselmo. In central Marin a one bedroom apartment can be rented for $1850-1950. In Southern Marin cities, such as Sausalito and Tiburon, one bedroom apartments start at $2250 and increase from there.

Apartment sales in the first quarter 2017 were also down from the first quarter of 2016, with reduced inventory available. Sales of 5 units or more included the following:

Address Price Units Per Unit GRM<
83-87 Ethel Ave., Mill Valley $4,500,000 9 $500,000 15.9
7 Merrydale Rd., San Rafael $2,725,000 8 $340,000 14.6
1704 Lincoln Ave, San Rafael $3,207,000 12 $267,000 19.5
22 San Pablo Ave., San Rafael $4,840,000 17 $284,000 19.7
11 Hillside Ave., Kentfield $2,250,000 5 $450,000 21.5
50 Barbaree Way, Tiburon $125,000,000 284 $440,000
355 Canal St., San Rafael $8,000,000 43 $186,000
335 Enfrente Rd., Novato $10,500,000 40 $262,000

Many of the gross rent multipliers that you see here were high because rents were below market by 30% or more. Other sold properties with lower GRM’s had rents at market at the time of sale.

I expect to see the continuing low inventory in the Marin County apartment market place with continuing strong investor demand throughout the remainder of 2017.

If you would like to discuss adding to or exchanging from your current Marin County investment portfolio, please give me a call at 415-302-7730 and we can discuss your particular situation.

My recent sales:

  • Off market office property at 125 Camino Alto, Mill Valley, sold for $3,900,000 at a 5.5% CAP rate. Sold 2/21/17. Exchange buyer from Southern California sale.
  • Off market office/warehouse property at 4 Commercial Blvd. Novato, sold for $1,900,000 at a 6% CAP rate. Sold 3/11/17. Exchange buyer from Southern California sale.
  • On Market 10 apartment units at 145 Kent Avenue, Kentfield, sold with multiple offers and closed at a sales price of $3,200,000. All cash local Marin County buyer.
  • On Market mixed use at 74 Corte Madera Avenue, Corte Madera, sold for $1,650,00 with a 5% CAP on proforma rents. All cash exchange buyer.