Oakland, California (EastBayDaily) — A private investor has acquired the apartment complex known as Diamond Terrace Condominiums, in Oakland, CA, for $6,300,000. The complex consisted of 30 condo quality apartments ranging from one to three bedrooms and a ground floor retails space. The roughly 31,000 sq. ft. building was completed in 2012. The unnamed seller purchased the broken condo complex at a discount and completed the construction. Baniqued Commercial Real Estate’s (BCRE) broker associate Davide Pio represented the buyer.
When asked about why the buyer acquired this particular asset Davide Pio noted, “Stability. The buyer is confident about the return he’s going to continuously receive for the next five to ten years.” Continuing, “The buyer was stuck in a situation you hear all-to-commonly nowadays. Too little return in the bond market and too much risk in the equity market. How can you stomach 10-20% swings of your stock portfolio every 48 hours like in 2011? The investor is part of the growing group of people who are looking to relocate their stocks and bonds into a growing class of alternative investments–in this case, real estate.”
Apartment cap rates in the East Bay have been trending downward, along with most of the San Francisco Bay Area. “Many investors are interested in the Bay Area. Rents are skyrocketing. Due to the tech activity of San Francisco and Silicon Valley, quite a few colleagues and I are fairly confident it will continue like this for a good two to three years. The Bay Area – along with a few other markets – is in its own ‘bubble’ from everywhere else,” says Pio. Apartment rates in San Francisco for 50 units or large complex’s jumped 12.9% in the last 12 months, while Oakland and San Jose have increased by 14.4% and 10.1% respectively according to RealFacts.