With apartment rents in San Francisco continuing to be up to $2.50 per square foot higher than many East Bay cities, developers see substantial room for growth in the market as renters, especially millennials, are increasingly priced out of San Francisco and look to other transit-accessible, urban-feeling cities that are more affordable, especially Walnut Creek.[contextly_sidebar id=”Uq7dq1S6LtYwMat0XKCmKyuBqikgj1Vd”]Panelists at a recent Urban Land Institute presentation at the Marriott Hotel in Walnut Creek said the East Bay city’s demographics portend a steady demand for housing in the near future. According to the city of Walnut Creek, of the city’s population of 65,684 (circa 2013), 56 percent of the residents are 18 to 64 years old, 61 percent are college graduates and the median household income is $83,419.
While describing a new apartment project called The Landing, Lauren Colbert, project manager for the developer BHV CenterStreet Properties of Danville, reiterated millennials’ attraction to Walnut Creek, especially to its “urban vibe and transit accessibility to major Bay Area employment centers.” Colbert said the city is within a 30- to 35-minute BART ride to San Francisco.
Colbert said Walnut Creek’s median monthly rental price of $1,600 compares favorably to Oakland’s, at $1,795, and even more so to San Francisco’s, at $3,200.
“The population in the Bay Area is growing significantly faster than the housing supply, with San Francisco adding 4.5 people for each new housing unit in 2013,” Colbert said. “With occupancies in San Francisco upwards of 97 percent, this creates significant demand overflow that benefits the East Bay market.”
She added that the apartment market in downtown Walnut Creek is driven by two primary groups: millennials and renters by choice. “Unlike prior generations, millennials are waiting longer to buy homes and prefer to rent in more urban environments,” she said. “With a national saving rate of negative 2 percent for people under age 35, down payments present another large obstacle to home ownership. Renters by choice are looking to avoid the hassles of owning a home and come to Walnut Creek for the walkable, urban lifestyle and high-end product.”
CenterStreet’s The Landing is catering to this market with “superior design and modern amenity packages with targeted features, such as wine storage, pet spa, bike spa, roof deck and [an] outdoor kitchen,” Colbert said
The Landing will comprise 178 market-rate apartments and is located directly across from the BART station at the intersection of Interstate 680 and Ygnacio Valley Road. Construction is scheduled to begin in the third quarter of 2015, with completion set for the second quarter of 2017.
Essex Property Trust last year began demolition of an office building and retail building at 1500 Newell Ave., making way for a new mixed-use project called The Village, located about one mile from a BART station. The $81-million project will consist of 49 two-bedroom condominium apartments, averaging 1,600 square feet, which the company initially intends to rent, and 35,000 square feet of retail space, according to John Eudy, Palo Alto-based Essex’s executive vice president. Apartment leasing is estimated to begin sometime in the third quarter of 2015.
Mill Creek Residential Trust of Walnut Creek is moving ahead with its 126-unit Modera North Main Apartments project after acquiring the property in 2011 and spending a year fighting a legal challenge with the carpenters union. The L-shaped four-story building, which wraps a Chevron station and is in walking proximity to the BART station, will consist of 75 percent studio and one-bedroom units and will target single millennial adults, dual-income couples with no kids and young families with preschool-age kids, said Don Peterson, Mill Creek’s senior managing director. Other amenities include a roof terrace, resort-style pool, clubhouse and fitness center, wine lockers, barbecue area, pet run, bicycle parking, electric vehicle charging and City CarShare along with a large internal landscaped courtyard.
Also, SummerHill Apartment Communities of San Ramon is planning to soon open the first of four occupancy phases of its 300-unit BRIO complex, located four blocks from BART on Civic Drive. BRIO will offer one- and two-bedroom units ranging in size from 667 square feet to 1,051 square feet and sits on a five-acre site that will include parking for more than 475 cars. Amenities include a central courtyard with a swimming pool and spa, five outdoor kitchens with dining areas and a clubhouse with a media room, a lounge area and rooftop terrace, according to Kerry Zimmerman, vice president of acquisitions.
As to what drove SummerHill to the site, Zimmerman said, “Walnut Creek and the East Bay has a long-term, ‘steady Eddie’ rental rate market.” He said the developer is looking at rents of approximately $3.11 per square foot for BRIO with 25 percent of residents coming from San Francisco. “We’re also letting potential renters in San Francisco know that they can get more for less in Walnut Creek, plus a better quality of life.”