Colliers VP Ryan Wagner is all smiles because his team just repped the seller in a trade the brokerage says is the highest price paid per square foot for a multifamily asset above five units in the Bay Area. Sausalito-based Red Island Real Estate sold the 38-unit Casa Roja Apartments in Mill Valley to Belmont-based Woodmont Cos for nearly $14M, or $570/SF. Reasons for the sky-high price tag: The 1960s-era property got a big makeover in the last 18 months with top-notch interiors, it's super close to amazing schools, Marin County rents are nearing $4/SF and the dearth of for-sale Class-A product in the area. Ryan says private and institutional investors were chasing the deal.
Ryan tells us Casa Roja (pictured) is an example of how product differentiation can yield extremely high pricing. While many owners are making minor interior changes, they only generate minor upside in rents. He says comprehensive renos that create condo-quality finishes and refined common areas have the ability to completely change a tenant profile and dramatically increase revenue. But as the bar to home ownership remains so high, developers and investors have turned to multifamily projects. That's where young families can find housing in safe areas near good schools, he says.
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