May 21, 2012, Walnut Creek, CA – The East Bay Multi-Family market continues to look healthy as several factors signal growth in 2012, according to the Multi-Family Advisory Group of Colliers International, the leading global real estate firm’s located in Walnut Creek, CA. These signs include an improving jobs outlook with growth across several industries, overall population growth in the region, a continued slide in home ownership rates, and rent growth across most East Bay submarkets.
On the supply side there have been virtually no new multi-family deliveries over the past several years, resulting in increased occupancy levels throughout the East Bay. That coupled with a distressed single family market and East Bay population growth, has led to an overall increase in demand throughout the region. New multi-family development projects are going through the various stages of the approval process in many East Bay cities, including Walnut Creek, Dublin, Lafayette, Pleasanton and Oakland.
Occupancy for the East Bay remained above an impressive 95 percent, despite the strong rental rate growth which occurred over the quarter. That said, Alameda County continues to outpace Contra Costa County with increases in both average asking rents and occupancy as rents increased 1.8 percent and occupancy increased to 96.4 percent. Contra Costa County saw increases in average asking rents of 1.3 percent and average occupancy of 95.2 percent during the first quarter of 2012.
During the first quarter of 2012, there were only 18 transactions of 10 units or greater in the East Bay. Of those 18, ten were transacted off-market without the benefit of a conventional marketing period. For the first time in several quarters, there were no institutional deals in either East Bay county. This is likely to change, however, given the strong improvement in the first quarter 2012 of rental rates and occupancy levels.
Rising rents and stable occupancies should continue to drive demand in the region. The increase in off-market transactions during the first quarter will likely continue as the year unfolds, and should do so until such time that the market returns to a reasonable transaction velocity.
Full report: Q112 Multifamily Report