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9/03/21
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Foothill Terrace, a 25-unit multifamily property in San Leandro, recently sold for $6.875 mil, or $275k per unit. Located on a 1.16-acre parcel, Foothill Terrace is comprised of four buildings with approximately 21.5k sf of rentable space. Each 848 sf apartment unit includes two bedrooms and two bathrooms, one of which is a true master bedroom with an ensuite bathroom and walk-in closet.
Prior to putting the property on the market, the previous owner made considerable improvements to seven units, installing granite counter tops, new cabinets, bathroom vanities and shower surrounds, as well as vinyl plank flooring. Two units are considered fully renovated. The remaining sixteen unrenovated units were positioned to prospective buyers as having significant value-add potential to capture post-renovation rents 20% above current in-place rents.
Additional improvements over the past several years were also made to the property’s exterior, including new siding, new roof and gutters, repair or replacement of eight balconies and new exterior paint. The property also boasts both covered and uncovered parking for 50 vehicles and three on-site laundry rooms.
Rich Martini with Colliers procured the buyer and seller in the transaction.
“The sale of Foothill Terrace confirms the ongoing investor demand for well-located East Bay value-add multifamily properties,” said Martini. “Buyer interest was heightened by the presence of all two-bedroom, two-bath units as well as the opportunity to renovate unit interiors upon turnover, mark rents to market and significantly increase net operating income.”
Martini added, “Demand for multifamily in East Bay markets such as San Leandro remains extremely high as apartment rents in these submarkets have held up very well over the past year and a half compared to more urban centers such as San Francisco and Oakland where COVID lockdowns triggered a mass exodus out of urban core cities.”
Market fundamentals held strong in San Leandro over the course of the past year. Occupancy in San Leandro at the end of 2020 was 95.1% compared to overall East Bay occupancy which was 94.2%. Foothill Terrace’s unrenovated, partially renovated and fully renovated units turned in 2020 and averaged $2,106 per unit at lease up.
Foothill Terrace is located in the heart of the East Bay, minutes away from Downtown San Leandro and within a five-mile radius of the San Leandro BART station and Bay Fair Station. Its transit-oriented location puts residents near major freeways, making employment centers in Oakland, Fremont, San Jose and San Francisco completely accessible. A plethora of retail shopping in San Leandro, Castro Valley and Hayward offer a draw for prospective tenants looking for the comfortable lifestyle that a community such as San Leandro has to offer.
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