Stockbridge Pays Approx. $100MM for 107-Unit Etta in San Francisco

Stockbridge, Etta, San Francisco, 1285 Sutter, Gerding Elden, CBRE, Paragon Real Estate Group, Bay Area, Polk Gulch, Pacific Heights

Etta San Francisco

By Jon Peterson

San Francisco-based Stockbridge Capital Group paid approximately $100 million or $887,000 per unit to buy the 107-unit Etta apartment complex in San Francisco, according to multiple sources that were aware of the transaction. The property’s value is roughly 95 percent from the apartment and 5 percent from its retail component.

The property was sold and developed by Portland, Ore.-based Gerding Elden. The listing agent on the sale was Tyler Anderson, a vice chairman in with CBRE in its Phoenix, Ariz. office. Both of these firms did not respond to phone calls seeking comment for this story.

Stockbridge declined to comment when contacted for this story. The property is located at 1285 Sutter Street in San Francisco. Gerding Elden had fully developed the property by the end of 2013, which is now 100 percent occupied.

The retail component of the property totals 9,500 square feet. All of the space is occupied by a Walgreens store.

Stockbridge made the acquisition of the property for one of its commingled funds, according to sources familiar with the transaction. The location of the complex is attractive as it’s in a submarket not seeing a tremendous amount of new development.

The Etta complex represents one of the few 100 percent market rate apartments developed in San Francisco. Most of the new projects being built do have some sort of an affordable component associated with them.

The sale was part of a national apartment portfolio of apartments that Gerding Elden had sold. The properties in the portfolio included assets in other markets like Los Angeles, Boston and Seattle.

San Francisco apartment rental rates are reaching new heights. According to a Paragon Real Estate Group’s first quarter 2015 report, the median rent for a one-bedroom apartment in San Francisco hit a record high in January at $3,410. That made the Bay Area city the highest in the country. While this location is in the Polk Gulch submarket of the city, the report only provided insight into the neighboring Pacific Heights submarket, which is boasting 1.7 percent vacancy, according to Paragon.

It is no secret that over the last few years San Francisco has garnered national attention for its growing employee base as technology firms over that time converged on the city. Employers brought in approximately 350,000 new residents over the last six years to San Francisco, according to Paragon, and many have moved into popular neighborhoods like the Polk Gulch and Pacific Heights.

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