Marin Rents Continue to Climb; Inventory Tight with Off Market and Multiple Offers Common

San Rafael – Even with climbing prices apartment investors are continuing to snap up Marin County properties with the assurance that the steady rent increases will offer 4-5% yields. Many investors are coming from out of the more expensive markets in San Francisco where gross rent multipliers can be as high as 18.

Here in Marin most apartment properties are priced on projected market rents with gross rent multipliers from 14-16 times gross. As I noted in my last newsletter, the spreads right now between actual rents on apartment offerings and current market rents is close to 30%. Most owners have not kept up with the surging rental market and buyers are seeing huge upsides on potential income.

For example, I just closed on an off market property in central San Rafael which included 4 duplexes on a single one acre lot. Held by the same owner for over 40 years, the property grossed $149,000 annually at the time of sale but the projected market rents were nearly $190,000. The property closed at $2,100,000 and was fully rented. (See pictures and details below).

In another central San Rafael sale, 11 units in Gerstle Park at 107 Marin Street sold for $2,450,000 with a price per unit of $222,000. The gross rent multiplier was 13 GRM. The property was a mix of 10 one bedrooms and one two bedroom.

A recently sold six unit property in downtown San Anselmo, at 22 Tamalpais Avenue, was listed for $1,479,000 and received multiple offers. The final sales price was $1,500,000 or $250,000 per unit with a gross rent multiplier of 14.7. The new owner plans to complete improvements to the property and raise rents to market.

Marin County rents are expected to rise again this year by 9.5% after a 24 month run up that increased rents by 30%. The strong local economy and high tech hiring in the Bay Area is adding to rent and price pressures to available housing. Industry experts expect this trend to continue which will add value to North Bay apartment investments and produce a positive climate for real estate investors.

With tight apartment inventory my office is locating off market properties for serious investors. If you are looking or wish to trade out of your current apartment holdings, please give us a call at 415-302-7730 for a market update and consultation.

Yours very truly,

Katherine J. Higgins
Broker Associate / Multifamily / Investments

Below is an update of current listing and sales activity in my office:

  • Just Sold!
    Off market sale, 4 duplexes on acre lot
    Offered at $2,200,000 and sold for $2,100,000
    10-24 Davenport Court, San Rafael CA 94901
    Unit mix:
    4 one bedrooms, 1,000-1,080 sq.ft.
    4 two bedrooms, 1,225 each with fireplaces
  • Pending!
    Totally remodeled Gerstle Park 5 Units
    Offered at $1,485,000
    Call for sale price
    608 C Street, San Rafael CA 94901
    4 studios and one junior one bedroom
  • Available!
    Remodeled Downtown San Anselmo 4-plex
    Offered at $1,354,000
    835 Sir Francis Drake Blvd., San Anselmo CA 94960
    All large 750 sq.ft. one bedrooms rented for $1,800 each.