NAI Northern California Presents: $14 Million Sale of Trophy 44-Unit Project in Oakland, CA

Leader in multifamily, retail, and office investment transactions closes major deal in the heart of Oakland’s Grand Lake neighborhood

OAKLAND, CA –  June 27, 2019 –  NAI Northern California is pleased to announce the sale of Vermont Apartments, a 44-unit property constructed in 1968. Tim WarrenKent MitchellRandell Silva, and Alex Lin represented the Seller in the transaction, and were able to generate an all-cash offer over the list price during pre-marketing. In addition, after securing a buyer, they were able to find a replacement property for their client to satisfy 1031 exchange requirement.

Vermont Apartments was situated on a 19,700 SF lot and consisted of two (2) 2 bedroom/2bathroom penthouse units, nine (9) 2 bedroom/1 bathroom units, twenty-eight (28) 1 bedroom/1 bathroom units, and five (5) studio units. The project also sat above 43 garage spaces, offering a nearly 1-to-1 parking ration, and offered four (4) on-site laundry rooms, a beautiful pool, and balconies with sweeping views. Over the years, it was very well maintained and provided the new owners with the potential of significant upside upon unit turnover.

It was centrally located, with easy access to the 19th Street BART station and several city bus lines, just blocks away from Trader Joe’s, the Oakland-Grand Lake Farmer’s Market, various cafes, and Lake Merritt, providing tenants convenient access to all daily amenities. Furthermore, many of Oakland’s best restaurants and nighttime attractions were also within walking distance, including the Grand Lake Theatre and shopping opportunities such as Gap, Urban Indigo, and others.

 

About NAI Northern California

NAI Northern California is a full service commercial real estate firm serving the San Francisco Bay Area and beyond. Our team delivers technology-enabled commercial real estate services that create value for our clients, industry, and communities.

NAI Northern California is a partner of NAI Global, the largest commercial real estate brokerage network with more than 400 offices worldwide and over 7,000 professionals completing in excess of $20 billion in commercial real estate transactions globally.

Recently on the San Francisco Business Times Book of Lists, NAI Northern California hit the top 5 and 6 spots in San Francisco and the East Bay and top 15 Bay Area wide. NAI Northern California is part of the NAI Global network, recently recognized by Lipsey as the number 4 most recognizable commercial real estate brand.

How to take advantage of “Opportunity Zones”

The Tax Cuts and Jobs Act of 2017 created new rules for “opportunity zones,” underdeveloped neighborhoods, sheltering your investments from federal taxes with minimal limits and employment requirements. You only have a few more months to maximize the benefits of this program: so how does it work?

When you sell a property, you can immediately reinvest that gain, tax-deferred, into an Opportunity Zone by depositing it into a qualified Opportunity Zone fund (either one you create or a traditional one). Then you have two choices; buy a property in one of the zones, or invest in a business in the zone. We’ll focus on the property option.

You have 31 months to purchase your new property, whether it’s multifamily, retail, industrial, or office space. Eventually, you need to invest the same amount of money as the property’s structures (not land!) currently are worth; if the current building is worth $100,000, you need to spend $100,000 remodeling, rebuilding, or otherwise upgrading the building. This means if you buy a property with a structure worth very little, you don’t have to do much to get the tax benefits.

Speaking of benefits, not only is the tax on your original gains deferred until 2026, but if you hold it for seven years, 15 percent of that gain will completely avoid federal capital gains taxes. (You only get 10 percent if you hold it for five years.) And if you hold it for ten years and your new investment appreciates? None of that appreciation is taxable under federal capital gains taxes. This is an opportunity indeed!

There are 102 opportunity zones designated around the Bay Area, including in Oakland, Concord, San Rafael, Santa Rosa, and even San Francisco; visit the SF Business Times’ site for maps and stats about the zones, or contact one of our advisors to find a property that matches your investment goals.

Sources: BizJournals.com, Tax Policy Center

Read our June 25, 2019 newsletter

Housing development and building pipeline up to a record high in San Francisco

In San Francisco in 2019 the overall pipeline of housing being developed hit a record 72,865 units, up over 5,050 from Q1 2018.

The number of units in developments which are currently under construction and should be ready for occupancy within the next year or two has increased, from 8,100 at the end of last year to 8,500 in the Q1 2019, which is within 3 percent of the current cycle peak of 8,800 set in Q3 2015.

Around 16,800 permitted and approved units are in play, while some major housing projects in Treasure Island, Park Merced, and Candlestick area.

Read more on Socket Site

 

NAI Northern California Presents: $18 Million Sale of 24 Unit Project in Mill Valley, CA

Leader in multifamily, retail, and office investment transactions closes major deal on fully-leased apartment complex in Marin County
MILL VALLEY, CA –  June 13, 2019 –  NAI Northern California is pleased to announce the sale of Central Valley Homes Apartments, a 24-unit project constructed in 1988 and offered for the first time in 2019. Joby Tapia represented the Seller in the transaction, and said that despite “some tremendously difficult challenges,” they were able to successfully close the transaction at the $18,000,000 asking rate with multiple offers and ongoing construction during escrow.

Among the obstacles he encountered was a water intrusion event, which added substantial complexity to the deal, as well as having to organize multiple bids and contracts with several vendors and maintain insurance compliance throughout the process. The effort was well-rewarded, though, as the Seller wrote affectionately of Mr. Tapia’s “excellent service to Central Valley Homes, not just for the sale … but also for [his] advice and expertise on countless property management issues.”

Central Valley Homes Apartments consisted of 24 three-bedroom units with individual APNs and significant upside on the rents, as well as potential condo exit. One-third of the units were highly refurbished and attracted rents approaching $3.00/SF, while the remaining units offered investors the opportunity to continue a value-add strategy that allowed for $1,000+ rental increases per un-renovated unit.

About NAI Northern California

NAI Northern California is a full service commercial real estate firm serving the San Francisco Bay Area and beyond. Our team delivers technology-enabled commercial real estate services that create value for our clients, industry, and communities.

NAI Northern California is a partner of NAI Global, the largest commercial real estate brokerage network with more than 400 offices worldwide and over 7,000 professionals completing in excess of $20 billion in commercial real estate transactions globally.

Recently on the San Francisco Business Times Book of Lists, NAI Northern California hit the top 5 and 6 spots in San Francisco and the East Bay and top 15 Bay Area wide. NAI Northern California is part of the NAI Global network, recently recognized by Lipsey as the number 4 most recognizable commercial real estate brand.

About Joby Tapia

Joby is an accomplished Multifamily Executive with over 20 years experience managing commercial and multi-family assets, including market rate and rent-controlled properties, for both private and institutional owners throughout Northern California. With his strategic, creative and entrepreneurial skill set, he was able to generate millions of dollars in excess value by implementing budget-appropriate measures to generate the best possible market rents while maintaining a strong focus on the ROI of renovation/turnover dollars.  Leveraging his operational and market expertise with his detail-oriented and analytical approach, he has successfully closed numerous difficult deals, generating maximum benefits to his clients.

Tech booms, but small retail struggles in Silicon Valley

While Silicon Valley’s tech sector is thriving, cranking out IPOs and flooding the region with high-paying jobs, its retail industry is struggling to keep its boutiques and tiny mom and pop shops open.

The number of retail businesses — particularly small retail businesses — has dropped significantly in the Bay Area between 2007 and 2017, according to data from the state Economic Development Department. Experts blame a host of factors, including high rents, increased competition from online vendors, a rising minimum wage and increased health care costs.

The average rent per square foot for retail space in San Jose increased nearly 9 percent between 2015 and 2017. It also rose 9 percent in Oakland, and in San Francisco, it inched up almost 5 percent. Even incremental rent hikes can cause trouble for small businesses, which often operate on a thin profit margin.

At the same time, Bay Area home prices and rents have become so expensive that many local retail workers can no longer afford to live near their jobs, forcing them to commute long hours or quit.

Read the full article on The Mercury News

Read our June 11, 2019 newsletter