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Brokerage Closes $238M In Multifamily Transactions In Bay Area

Levin Johnston of Marcus & Millichap Senior Managing Director Adam Levin with his wife, Ella, daughter Taylor and son Connor

Investors are flocking to multifamily assets in the Bay Area. Multifamily brokerage Levin Johnston Group represented 17 transactions in Silicon Valley, the Peninsula and the South Bay during Q4. The transactions totaled over $238M and involved more than 610 units.

"The multifamily market is advancing rapidly in the South Bay market, and many investors remain bullish on commercial real estate as a whole," Levin Johnston Group Senior Managing Director Adam Levin said.

Of the 17 transactions completed, the sale of Arbordale Gardens Apartments in Fremont was the largest. The $28M transaction involved a 72-unit building at 42010 Blacow Road. Levin Johnston represented both buyer and seller, which were private owners. Other transactions occurred in Sunnyvale, Milpitas, Belmont, San Jose, Santa Clara, Campbell and San Mateo.

Levin Johnston Group is on track to outpace last year's Q1 and the company's year-over-year projections are strong for 2018, Levin said.

He said the current activity is based on sound market fundamentals, such as strong economic and employment growth.

Levin Johnston of Marcus & Millichap Senior Managing Director Robert Johnston and his wife, Natalie

Levin Johnston Group Senior Vice President Robert Johnston said Silicon Valley unemployment is at an all-time low. With companies expanding, such as Google, the need for housing will continue to skyrocket. Johnston said his company helped a client acquire one of the multifamily projects near the proposed Google campus during Q4.

Individuals working in the tech industry are not buying houses because of the lack of affordability and a need to remain nimble in case they need to move to a new opportunity, Levin said.

"Workers in the Silicon Valley flock to rental units, resulting in an extremely profitable opportunity for the investors we serve," Levin said.

High net worth, highly educated individuals have been investing in Bay Area multifamily, Levin said. Value-add buyers are not as prevalent recently because rent growth is slow and steady instead of spiking.

Silicon Valley and the South Bay are ideal for long-term investors seeking stable, consistent risk-adjusted returns, Levin said.

Transactions remain active with investors seeing more stability with multifamily assets, Johnston said.

"We predict that 2018 will be a huge year for commercial real estate,” Johnston said. "There is a lot of capital moving, and we continue to see demand outpacing supply."

CORRECTION, JAN. 24, 12:59 P.M. PT: The first quote in the story was attributed to the wrong individual. The article has been updated.