By Jon Peterson
Aliso Viejo-based Lennar Multifamily Communities and New York City-based Deutsche Asset & Wealth Management are planning the development of Parker Place, apartment and retail mixed-use project located at 2598 and 2600 Shattuck Drive in Berkeley.
Construction will be started in the near future. “We are anticipating beginning the development either in the fourth quarter of this year or during the first quarter of 2015,” says Alex Waterbury, president of Northern California development for Lennar Multifamily. He works out of the company’s regional office in San Francisco.
The project has had its share of development controversy. According to Berkeleyside, the proposal was challenged in court by a group led by Patti Dacey, the late former Berkeley planning commissioner. In December of last year, the Court of Appeals upheld the Superior Court’s decision to allow the project to proceed.
Lennar would not comment on the total development cost for Parker Place or what it paid for the site. Deutsche declined to comment for this story when contacted by e-mail.
These two companies are building the project together in a joint venture. Lennar will be responsible for all of the main day-to-day duties on the development. Deutsche is its equity partner.
The property will have 155 units of apartments and 20,000 square feet of retail. The property is now fully entitled. The site is the current home of the Berkeley Honda car dealership. “Once we start the project, I would think that it would take us two years to complete it,” estimated Waterbury.
This development would be the first project in Berkeley for Lennar Multifamily Communities. There are several things that the developer likes about the Berkeley market. “The city is a very growth-restricted market. It has close access to jobs, which includes the University of California. Through BART it has public transportation nearby,” said Waterbury.
The apartment part of the project will have 31 units, or 20 percent of the development, slated as affordable units. The rest will be market-rate units. The retail component has a very flexible zoning. This includes a dining establishment and a potential fitness operation.
The apartment market in Berkeley does offer renters a lower price alternative to San Francisco. “The average asking rent in San Francisco is now at around $3,200 per month. Rents for apartments in Berkeley are at $2,800 per month. I think that this is one of the main reasons that many renters in San Francisco are now looking at places like Berkeley and Oakland as another place to live,” says Nick Grotjahn, sales and client services representative for Novato-based real Answers. This apartment research firm tracks apartment markets throughout the San Francisco Bay Area.
The overall Berkeley apartment market has very strong demographics. Rents over the past 12 months have gone up by 12.4 percent, according to real Answers. The average occupancy rate for properties of at least 50 units have headed north by 6.2 percent over the same time period. Occupancy has increased from 89.8 percent in the second quarter of 2013 to 95.4 percent for the second quarter of this year.
Image and video courtesy of David Baker Architects