Governor Newson just announced that by June 15th, we will be allowed to go back to pre-Covid life, but we will still have to wear a mask.
With Spring here and over 2 million Californians getting their Covid shot each week, things are changing!
For the first time in almost a year, San Francisco rents have gone up. Albeit, only 2%, but this is a sign that people are seeing that going back to work in San Francisco is going to happen. It may look different, hybrid or only 1-2 days a week, but people still want to be relatively close to work.
How does this effect East Bay rents?
In talking to East Bay multi-unit owners, we are having to give some rent concessions or its taking longer to get units rented.
It appears that the difficulty of finding new tenants is dependent on which neighborhood and the amenities of the unit.
I just rented a one bedroom unit in our building right off Piedmont Avenue. It took a little longer than pre-Covid times, but we got full market rent without any concessions.
Back in January, we had a vacancy in Adams Point. Although a popular and desirable area, I did agree to do one month of free rent. The rent agreed on through the lease was market rent. There were a lot more units for rent in this area. We had to do the temporary rent reduction to be competitive.
So, the actual rental rates compared to pre-Covid will vary.
In other area of Oakland and Berkeley, market rents have dropped a bit.
When UC Berkeley announces in person class for this Fall, rents near campus should rise!
Current Sales Market
If you are thinking about selling in the next 6-12 months, then starting the process now would be a good idea. The market is strong, as buyers are still paying prices based on income that is similar to Pre-Covid.
Also, current interest rates for loans are so low that buyers are being aggressive.
Then the issue that has come up is: How do I defer the capital gains taxes.
1) Delaware Statutory Trust. Click DST Tax Deferral,
2) Doing a 1031 tax deferred exchange.
With regards to doing an tax deferred exchange, I have spent some time searching in solid markets (Seattle, Austin, and Reno) for both commercial Triple Net (NNN) opportunities and multi-units that are all delivering at least a 5% CAP rate return.
Click: 1031 Exchange Opportunities
I did a presentation on increasing your rental revenue at the East Bay Rental Housing Association in last year. Click Here: Maximizing the Return on your Investment for the highlights.
Please reach out if you are interested in getting more information on the DST option or 1031 exchange.
I recently closed a Four-Plex in Oakland in the Fall, we got an over asking price offer with no inspections. Things are still closing, although it does require some creativity around inspections, appraisals, and one on one showings.
Current Market For Building Sales
For example, if you want to sell your apartment at this time, I can help you with an evaluation and guidance.
I have spoken to two of the top lenders for East Bay multi-units and they are working on, and closing transactions at this time. I can forward their contact info if you want to speak with them.
Right now, If buyers have a good down payment they can get a loan and I can navigate you through the process.
It is always important to get guidance and advice from experienced multi-unit brokers who will market your property extensively to all potential buyers and brokers. Posting a new building on all websites and sending out emails blasts gives the property visibility to literally tens of thousands of potential qualified buyers.
Looking forward to a beautiful Spring 2021!