The tech market is driving interest in the Bay Area. Multifamily vacancy as a whole in the region dropped by 80 basis points to just 3.4 percent, according to a new market report from CBRE.
But specifically, the numbers were even more eye-opening in San Francisco alone, with vacancy in the city dropping to 2.9 percent. This is the lowest level that San Francisco's multifamily sector has seen since 2001.
Rent growth in the Bay Area was 5.4 percent, which outpaced the fourth quarter's 4.3 percent. Rents in the first quarter were particularly strong in the San Francisco/SF Peninsula region, which enjoyed a $222 boost from the previous three months.
Moreover, supply and demand were at a healthy balance, with net absorption at 6,450 units. This resulted in a 5.6x absorption to devlieres ratio.
According to CBRE, artificial intelligence has fueled the strong multifamily fundamentals in the Bay Area.
However, there was some softness, particularly from an investment standpoint. Multifamily sales in the region fell to $1.65 billion, which is down from each of the three previous quarters. CBRE attributed this trend to the "lack of inventory on the market."
The largest trade involved the 904-unit Ballast/Goldman SF Apt Portfolio 2026 in San Francisco, which went for $221.62 million. That was followed by 320-unit Carmel Rincon Apartments and 115-unit 923 Folsom, which traded hands for $174 million and $64.25 million, respectively.
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