The four buildings are at 825 Post St., 1008 Larkin St., 750 O'Farrell St. and 72 Gough St. Pugh says that the portfolio has already drawn broad interest from prospective buyers, including many institutional investors, thanks to the prime location of the buildings near Downtown San Francisco and the favorable pricing in today's market.
Pugh says that another reason the portfolio is drawing investor interest is that it will enable a buyer to establish "an immediate and substantial ownership presence" or add to existing holdings in the San Francisco apartment market, which has some of the highest barriers to entry in the country. Such opportunities in San Francisco are rare, Pugh points out. He and Bonn have specialized in multifamily sales in the city for more than 20 years, he says, and, "There have only been two other times that we are aware of that a portfolio with this many units has been offered to the market in the city."
Pugh adds that the portfolio hold the potential for future rent growth because of below-market rents as a result of San Francisco's rent control ordinance, which allows units to be marked to market when they are vacated. Pugh also notes that, at an asking price of just under $140,000 per unit, the portfolio is priced well below replacement cost, which is now more than $300,000 per unit for multifamily development in San Francisco.
The 245 units include a mix of efficiencies, studios, one-bedroom and two-bedroom units, along with eight commercial units.
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