ULI San Francisco Blog

Apartment Talk in the East Bay

Bob Burke of Greenhart Land Company led a great discussion with John Eudy of Essex Property Trust, Chris Hudson of Hudson McDonald, and John Wayland of BRE Properties on the current trends on the residential apartment market in the East Bay.

Bob started with an overview covering some of current happenings in the East Bay residential market:

  • 2,100 units to be delivered in 2013 versus 700 units delivered in 2012
  • 2,500 units are under construction and 5,000 units have been submitted to City Planning Departments
  • Rents have increased by 21% in the last three years, but slowing in 2013 with an average 3.3% increase
  • Oakland and Berkeley rents are up 7.7% while East Contra Costa County rents are only up 1.5%

Then, each panelist covered some of his current projects:

Essex Property Trust:

  • West Dublin BART Station: 309 Units, Delivery in Q3 2013
  • Emeryville Market Place: 109 Units, Delivery in Q3 2014
  • Walnut Creek Downtown: 49 Units with 33K SF of Retail, Delivery in Q1 2015

Hudson McDonald:

  • New Californian in Berkeley: Known to the community at the “Trader Joes Building”, 148 Units above the Trader Joes
  • The Bancroft House in Berkeley, a unique four apartment building built in 1903, with 4-5 Bedroom apartments serving the Cal student market
  • Ratcliff Designed Building, updated and leased to a Cal Sorority for student housing

BRE Properties:

  • Walnut Creek BART: 598 Units, 22K SF of Retail, built in 3 phases
  • Pleasanton Owens: 255 Units, 5,700SF of Retail
  • Pleasanton Hacienda: 251 Units

During the question and answer portion of the program the panelists and ULI audience members got into some interesting talking points:

  • The panelists seemed to agree that the projections for growth in the East Bay Apartment market would settle down to 3-4% in the near future
  • Catering to the Gen Y and Millennial markets requires building more common spaces, a contemporary feel, and some “edginess”
  • Construction costs have grown about 4% in the last year, mostly due to costs in concrete
  • Even though there has been talk about the single family market competing with the multi-family market, the panelists haven’t seen the competition yet
  • Tenant profiles have changed: There are more high income earners with an ability to pay higher rents who are staying in apartments longer prior to purchasing their own homes
  • Sustainability has been a great marketing tool, but the panelists haven’t figure out a way to monetize it yet
  • Retail sometimes makes the numbers work out, but you have to be careful because you can’t rely on the units above to provide the market to the retail – location is important to drive in outside customers

Authored by Brian DiBarnaba, Independent Consultant, San Francisco

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