Sacramento Multifamily Selling for Record Rates
Updated: Jun 12, 2020
Sacramento has seen two multifamily projects sell for groundbreaking prices in the last few years. The first was the 16 Powerhouse project on the corner of 16th Street and Powerhouse Alley. 16 Powerhouse is a six story product featuring ground floor retail/parking and five floors of multifamily on top. Located across from Fremont park this building featured 50 multifamily units averaging over a 1000 square feet apiece. This is in start contrast to other projects such as the 19J project where 80% of the units are studios averaging 415 square feet. Built in 2015 this project sold in 2018 for $570,000 per unit at an estimated cap rate of 4.75. The sales price was $32.5 million. This sale was seen by many as a crucial confidence booster for other central city multifamily projects.
The most recent project to sell was the Q19 apartments on the corner of 19th Street and Q Street close to the R Street corridor. This was a four story multifamily product with a modest amount of retail on the ground floor and it sold in April of 2019. Featuring 68 units with an average size of 650 square feet its units are significantly smaller than the 16 Powerhouse ones. This project sold for a price net leasable square foot of $580 and a total sales price of $26.8 million. Cap rates were not disclosed on this sale. This property is across the street from a dog park as well as only a few blocks from the famous Ice Blocks on the R Street corridor. This sale has contributed to interest along the refurbished R Street corridor.