Marin County apartment market sales volume increased by 30 percent last year over 2016 due to pent up buyer demand and a larger number of properties brought to market.
Even though rents have leveled off in Marin over the last 18 months, apartment investors still sought the security of owning in an exclusive market with no rent control and high demand for rental housing.
Sale of The Cove at Tiburon was the largest apartment sale last year at $255 million for 281 luxury units with a clubhouse and work out space, upgraded units and just five minutes to Highway 101. In Sausalito, a 21-unit high rise apartment property with Bay views sold for $15,500,000 or $553,000 per unit.
Other southern Marin sales included a 21-unit apartment complex in Mill Valley that sold for $7.4 million, or $352,000 per unit.
In San Rafael more than 12 apartment sales were recorded with the largest at $42 million for 82 recently constructed units at 33 San Pablo near the Marin County Civic Center. The price per unit was $519,000. In other San Rafael apartment complex sales, price per unit ranged from $227,000–$340,000, depending on upgrades and property location.
Closing capitalization rates averaged around 4 percent on actual rents. Many of the properties that turned over in Marin last year were estate sales with below-market rents and ample opportunity for buyers to upgrade units and increase rents.
RENT CONTROL?
Investors largely ignored signs that rent control may be coming to Marin County in the near future. The county Board of Supervisors, with jurisdiction over apartment rentals in the unincorporated areas of the county that includes around 2,000 units, passed an ordinance requiring mandatory mediation if a tenant complains about a large rental increase. The ordinance included a cap of 5 percent rental increase to trigger the mandatory mediation with the complaining tenant.
The next issue to be addressed by the Board of Supervisors is just-cause eviction, which would make it extremely difficult for landlords to evict a tenant without showing cause. Marin County cities with unincorporated areas include some areas of Mill Valley and all of Kentfield and west Marin.
Currently, the Marin Income Property Association, representing local landlords, is organizing to oppose these measures introduced recently by the Board of Supervisors.
Since the beginning of 2018, apartment inventory has dropped dramatically, and how this will affect sales this year is unknown. For now, exchange buyers are purchasing off market properties to complete their exchanges and properties brought to market are receiving multiple offers.
Source: http://www.northbaybusinessjournal.com/marin-multifamily-housing-investment