Is a Community Land Trust the Right Buyer for Your Property?

Our broker Max Rattner recently closed an impossible deal. The property was an eight-unit multifamily in Berkeley, but with a code violation, a majority of the tenants under Section 8, and roughly $500K of deferred maintenance.

Seller, buyers, tenants…everyone’s in a rough spot there.

But like a young George Bailey, Max’s team found a miracle of modern real estate: The Community Land Trust.

Land Trusts have existed since the time of kings as a means of public stewardship of land. Typically they’re public spaces like parks. But in 1968, several activists began what has become a growing trend of housing CLTs in the US.

CLTs are non-profit orgs that will acquire your property at market value and then own it permanently. Yet they’ll then “sell” equity in the property back to tenants, in what’s essentially a long-term lease. In lieu of paying (rising) rents, tenants earn a stake in homeownership. When a tenant then chooses to sell, he/she receives a portion of the property’s appreciation, while the Trust remains owner.

In an era of difficult housing affordability, CLTs are growing as an option for many people. There are SEVEN of them in the Bay Area alone. And for property owners, a CLT might present an opportunity to sell a challenging property at a fair price.

Those transactions still aren’t easy. Nonprofits are traditionally short-handed and bootstrapped. Their resources for navigating transactions are limited. But that’s where our agents fill an extra role in expediting deals. Max Ratter, Kevin Flaherty, Derrick Reedy and Tina Qi architected this sale perfectly, and know this landscape better than anyone.

We’ve made this nuanced option a specialty, and if the situation is right for you, we can open your property to a Community Land Trust.

So if you’re sitting on a property you may have thought was limited, think again. Contact us any time and we can explore this unique option.  

Big Tech Throwing Big Money at Housing Crisis

It seems every week we’re hearing about another BILLION dollars or more coming into the Bay Area housing market.

Most recently it’s Apple with $2.5 billion, one-upping both Facebook and Google’s earlier $1 billion each. Amazon and Microsoft are doing the same in Seattle.

Why is this a “trend” though? Why is there a tech “arms race” on this issue? The answer is one of the simplest Things You Learned in Kindergarten lessons:
 You Break It, You Buy It. 

Imagine the span of about 18 months from late 2007 to early 2009: 1) Apple introduces the iPhone; 2) Google releases the Chrome browser; and 3) Facebook hit critical mass, shifting from a little campus thing into a real social network and brand platform.

That’s when the world changed. Since then 500,000 tech jobs have been created. Every one tech job yields five non-tech jobs. And yet, only 50,000 new homes have been built. A recent McKinsey report estimates that 3.5 million new homes are needed by 2025 to close the gap.

So tech brings in thousands of bodies, throws tons of money at them, and demand+prices skyrocket. Now they’re throwing more money at the problem they helped create.

But money alone isn’t enough, according to experts who say the answer is “a combination of relaxed suburban zoning and permit regulations from local governments, aggressive home building over the next decade, public transportation alternatives, and a wider array of housing options beside single-family homes.”

And this is why we need to talk to you. 

The answer is taller multifamily properties, preferably near transit centers. So what are you sitting on? Ask yourself: 

  • Do you have a property near a BART or CalTrain station? Or major bus line?
  • If you could get zoning changed, could your current property be developed into housing? 
  • If you could get height limits changed, do you have a property that could be a higher-rise multifamily site? 
  • Could you get access to any of the $4.5 billion earmarked by tech to improve housing? 

Governments are ready to adapt, and you might have an ideal situation for a developer able to navigate City Hall. Contact us, and let’s look at all the commercial real estate investment opportunities that you might benefit from as the rush to build housing continues. 

US Neighborhoods with the Best Property ROI

The San Francisco Business Times released this report yesterday after crunching some Zillow numbers, showing the 20 neighborhoods in the US that have delivered the best return on real estate investment in the past 10 years. 

Many of the most lucrative markets lie north of San Jose…right in our wheelhouse. 

Now granted, this list looks at residential real estate. But we’ve all heard that rumor about a rising tide lifting other boats. As the Bay Area and Northern California has grown, it has ALL grown.

Let’s walk through this logically. People want to live in the dynamic City of San Francisco, or near their jackpot job in Silicon Valley. But they don’t want to spend what it costs to live there. So they fan out into the perimeter, raising demand in Richmond, Stockton, Merced.

Well guess what? It’s not just home-buyers in that scenario. It’s renters of multifamily units too. And now those people want shopping centers and auto repair shops and chiropractic offices. 

So if you’re looking for an ideal spot for a commercial investment, you might look at where the people are. Here’s where demand has grown the most.

Want to think about buying or selling in these areas? Consult with one of our advisors. 

Noel Carrillo joins NAI Northern California as Investment Advisor in San Francisco

NAI Northern California is pleased to announce that Noel Carillo has joined as Investment Advisor in San Francisco. Noel specializes in multifamily properties. He has called San Francisco home for nearly a decade, seeing the City evolve over one of its most transformative eras, and now brings that local awareness to his clients in a manner that transcends the transaction and commits to long-standing relationships through open communication and transparency.

Noel is originally from San Diego and is currently attending City College of San Francisco, where he is pursing his degree in Economics. His professional enthusiasm extends into his personal life where, aside from cherished downtime with friends and family, he pursues adventures like saltwater sportfishing–frequently netting yellowfin, bluefin, and yellowtail tuna–and travels to such far-off locales as Japan, Singapore, and Indonesia.

Learn more about Noel Carillo

NAI Northern California promotes Trey Sells to Investment Advisor

NAI Northern California, a member of the world’s premier managed network of commercial real estate firms, is pleased to announce the promotion of Trey Sells from Market Analyst to Investment Advisor. Trey specializes in multifamily and mixed-use real estate in the Castro and surrounding areas of San Francisco.

“Trey sets a high standard for exceptional client service and this promotion is well-deserved,” said James Kilpatrick, President of NAI Northern California. “As we look toward the future of NAI, we’d like to acknowledge Trey for his contributions and are confident he will be an asset as we continue to develop and expand.”

Trey has a background in entrepreneurship, education, and personal coaching. He studied neuroscience at Brown University, where he mastered the workings of complex and interconnected systems. After graduating in 2010, he started his own tutoring company and used his extensive and broad education to coach his clients and help them achieve their goals. His career in real estate started with a passion for architecture and beautiful homes; he managed the renovation of a luxury home and, in the process, gained an appreciation for the power of investment to change lives.

Trey is interested in building investment opportunities in real estate leasing. He sees huge potential for the growing advancements in technologies and building materials for real estate to redefine the way we live and invest. His acute attention to detail and extensive network of contacts ensure he can provide the best experience and outcome for his clients.

Trey was born in southern California, where he spent his early childhood, and grew up in northern Nevada near Lake Tahoe. He frequently visits and travels with his family, including his four nieces and nephews. He is very involved in service work for populations in need and values lifelong education and healthy living. He enjoys physical fitness and reading and writing creative fiction. Trey can be found enjoying the outdoors all around the Bay Area or writing in cafes on the streets of the Castro.

Cole Byrd joins NAI Northern California as Market Analyst in San Francisco

NAI Northern California is pleased to announce that Cole Byrd has joined as Market Analyst in San Francisco. Cole is training to be an investment advisor, specializing in multifamily properties. Cole was raised in Orlando, FL and Charlotte, NC before making the move to San Francisco. He graduated from the University of San Francisco with a bachelor’s degree in Entrepreneurship and Innovation and began his career in the automotive industry, working for Sonic Automotive and AW Collision Group. NAI Northern California is proud to welcome him to the San Francisco team.

Learn more about Cole Byrd

Investor confidence in multifamily real estate begins recovery

According to a survey by National Real Estate Investor, confidence in multifamily properties appears to be recovering after a dip in 2018, though all other classes of commercial real estate have been neutral or dropped slightly. The survey asked respondents to rate the attractiveness of the major commercial real estate markets on a scale of one to ten. Most investors prefer multifamily and industrial properties over hotels, office, and retail; last year multifamily and industrial were tied for desirability, but this year multifamily pulled ahead at a 7.9 and industrial fell to a 7.5. They are both still well ahead of the other categories, though; hotels are a 5.9, offices are a 5.8, and retail is just a 4.8. 

Compared to 2018’s rankings, hotels dropped .2 points, offices dropped .1 point, retail held steady, and industrial dropped .2 points. Overall, multifamily has been a rock in the current real estate cycle, despite cap rates being driven lower by the high demand for multifamily. 

While desirability doesn’t necessarily reflect actual sales and purchases, sentiment can be a useful data point in the commercial real estate market. For more information about the current state of the market and how the San Francisco Bay Area differs from the nation as a whole, contact one of our advisors; we have specialists in multifamily and industrial properties as well as office and retail.

Source: National Real Estate Investor

NAI Northern California Presents: Record-Setting Sale of Multifamily Building in San Pablo

Sale of 2394 Road 20 in the East Bay Area by the Ethan Berger Team sets record price per unit

SAN PABLO, CA –  July 16, 2019 –  NAI Northern California is pleased to announce the sale of 2394 Road 20 in San Pablo for $4.495 million, setting a new record for price per unit for San Pablo multifamily properties. The Ethan Berger Team originally represented the seller, a local multifamily private equity group based in the Bay Area, when they purchased the apartment building in June of 2017 as a value-add opportunity in need of significant renovation and improved management. After successfully renovating and rehabbing the property, the units were re-tenanted, yielding nearly a 110% increase in the gross rents. The seller then enlisted the Ethan Berger Team (Ethan Berger, Benjamin Mandel, and Garrett Blair) to determine a value and market the property. They quickly developed multiple competitive offers and identified a buyer, achieving a record-setting price per unit of $249,722 and a total return on investment for the seller of nearly 95%. “After we identified the opportunity, we leveraged our local-market expertise and knowledge to help our client throughout the process of buying the property, improving it, and completing the sale.” said Ethan Berger, Senior Vice President at NAI Northern California. “Our relationships and extensive marketing platform were key in maximizing our client’s ROI.”

2394 Road 20 consists of fifteen large 2 bedroom, 1 bathroom apartments and three 1 bedroom, 1 bathroom apartments in a core Bay Area location. A complete renovation of the property and all of the units was completed in 2018. Each unit features laminate-wood flooring throughout the living spaces; brand-new kitchen and bathroom cabinetry; and new countertops, fixtures, and stainless-steel appliance packages. The exterior of the property was also upgraded with new paint, outdoor design features, landscaping, sewer lateral replacement, and parking lot striping. The building has on-site coin-operated laundry and is located within 10 minutes of El Cerrito Del Norte and Richmond BART Stations and less than one mile from Contra Costa College.

 

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.

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.

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.