IRR-Oakland Mid-Year Viewpoint 2015 Local Market Report - Multifamily
The East Bay multifamily submarket is benefitting from local economic gains and ihe impact of rising rents in adjacent Bay Area counties. With average asking rents in San Francisco now rivaling Manhattan at $3,400/month, up over 50% from 5 years ago, many residents have been priced out and are seeking housing in the nearby East Bay. Demand is especially high in transit corridors, with easy commutes to major employers in San Francisco, Silicon Valley, and East Bay hubs such as Oakland and Walnut Creek.
Local and regional office/R&D employers continue to follow a similar outward trend seeking more affordable rents, bringing residential demand from their employees with them. Market occupancy has hovered around 97% for the past 4 quarters and rent growth was nearly 15%, with almost all of this growth occurring in the fall of 2014 and early 2015. Rental rates for Class A apartments in prime urban locations are in excess of $3.50/SF, above feasibility levels for new mid-rise construction, spurring a large new development pipeline now underway.
Near, term, notable additions to supply are expected in the Inner East Bay communities of Oakland, Emeryville and Berkeley. These communities have more than 700 rental units under construction and another +/-1,200 approved. A large proportion of these are likely to begin construction in 2015-2016. Considering the large number of proposed units, it is possible that vacancy could soften considerably within the next 2-3 years, depending on a number of factors including rental market trends in San Francisco, potential loss of supply if multifamily units are sold as condominiums, and the amount of new supply that is ultimately completed.
Download the full version PDF of this Local Market Report below to see the charts, graphs, and tables not included above.
IRR Mid-Year Viewpoint 2015 comprises a National Overview report and 300+ two-page Local Market Reports for all key property types as well as additional resources, including metrics methodology, graphs, and tables; these free reports may be downloaded from IRR’s site here.