Many Bay Area companies are announcing their plans for office re-openings. These recent announcements have spurred a small growth in rents in San Francisco. This should continue to keep East Bay rents solid.
We filled a mid-April vacancy relatively easily. We will be getting the same rent as previous tenants. It took a little bit longer, but that’s the “new normal” during Covid.
Depending on the location, we are seeing: a decent market, maybe still giving a temporary rent reduction, or vacancies that are still hard to fill.
With the June 15th “reopening” getting closer, there is a sense of life getting back to normal. What this “normal’ looks like is still to be determined. There is a momentum back towards commuting, at least a few days a week, to work.
Outlook for East Bay Rents
Owners near UC Berkeley are seeing a lot of interest as students are anticipating campus re-opening. Areas near BART and core areas in Oakland and Berkeley and seeing an uptick in vacancy inquires.
It appears that the difficulty of finding new tenants is dependent on which neighborhood and the amenities of the unit.
If giving a temporary rent reduction, but getting market rent is our biggest concern, then this is a step in the right direction.
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.
My most recent transaction, a triplex, went into contract at full price, very short closing and no issues. If priced right and marketed fully, sellers are getting very strong offers.
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 reopening and Summer 2021!