42-Unit 625 Scott in San Francisco Sells for $18.05MM

Bay Area, San Francisco, The Delta Group 625 Scott Street

By Vladimir Bosanac

Multifamily properties across the greater Bay Area seem to have little difficulty in finding buyers. In a recent transaction that closed on August 1st of 2022, an entity associated with Sausalito-based Anthony Hay purchased the 42-unit asset in San Francisco located at 625 Scott Street for $18,050,000, or $429,761 per unit, according to a source with knowledge of the transaction details and public documents filed with the county. The seller of the property was a private family partnership called The Delta Group comprised of several families.

The property had been on the market since May of 2022, according to previous reporting by The Registry, and the asking price was $20 million. 

The building is a six-story property built in 1928 and located next to the city’s famed Alamo Square Park. It offers a mix of 12 one-bedroom and 30 studio apartments, as well as parking for 13 cars. The property has been well maintained over its lifespan, according to the property’s web page, including nearly $600,000 spent on various upgrades and repairs over the last couple of years. Those upgrades were to the windows throughout the building, exterior waterproofing, upgraded fire alarm system and fire escapes, as well as significant elevator improvements.

Many of the units feature hardwood floors and updated kitchens and bathrooms, and the apartments on the front of the building feature direct views of Alamo Square Park.

The conditions across the region started to look up for the multifamily sector, according to a recent Marcus & Millichap second quarter of 2022 market report. Metro employers added 14,100 positions during the first two months of this year and were expected to bolster San Francisco’s job count by 6.6 percent in 2022, stated the report. Marcus & Millichap sees this rate of employment growth as the second-highest increase among major markets in the country. 

At the same time, the vacancy in 2022 has been decreasing with renters absorbing 4,400 units, pushing vacancy to 6.3 percent in San Francisco, which is 100 basis points above the year-end 2019 mark 

Rent has been steadily on rising, as well. Two consecutive years of historically strong rate gains pushed the metro’s average monthly rent beyond $3,000, according to Marcus & Millichap. 

As apartment fundamentals improve and major employers commit to office returns, more investors are shifting their attention back to San Francisco, stated the report. As a result, annual deal flow more than doubled since last year, although most of the trades were in the $1 million to $10 million range. While institutional investors have yet to return in force, average per-unit sales levels hit $449,000 with cap rates holding steady at around 4.1 percent.

West Coast Commercial Real Estate News