It’s an interesting time for apartment ownership in the central Bay area in California. What I find most interesting in the classic 20-30 unit apartment market in good neighborhoods of Berkeley and Oakland is our rents have held up and are as high as they have ever been.

There are few defaults in multi-family properties with strong positive cash flow.  Loans are available.  It sounds like I’m talking about a different world than we’ve all been living in for the past year…in some ways that’s true.  While we suffer a reduction in cash-out opportunities in the market, even that has not completely gone away.

We aren’t seeing fire sales; we’re seeing low market price opportunities.  Rather than high vacancies and defaults we’re seeing typically under-managed properties with solid upside potential.

Quality apartments of classic, early-century construction in the East Bay area continue to represent an opportunity to develop 10% cash-on-cash returns and doubling of equity on a 2-5 year timeframe.  That’s business as usual.  And who can complain about that?

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