Bay Area Multifamily Completions Inch Forward
With job growth comes housing demand and this disparity underscores the fact that regardless of the need for housing that comes with job production, a market can’t absorb product that isn’t there.
SUNNYVALE, CA—The Bay Area has enjoyed heightened employment gains during the current economic cycle. In total, the region has added around 744,000 jobs, on par with another regional powerhouse for job creation, Dallas/Fort Worth.
But with that job growth comes housing demand and that is where the Bay Area comes up short. Developers have completed roughly 53,700 units in the Bay Area region during the current cycle, growing the existing inventory base by 9.4%. With relatively little new supply, occupancy rates have rarely strayed far from the cycle average of 96.2%, according to a report by RealPage. The disparity in demand despite numbers of jobs gained underscores the fact that regardless of the need for housing that comes with job production, a market can’t absorb product that isn’t there.
One project is hoping to make a small dent in that demand including affordable units as well. Leasing has begun for the Flats at CityLine Sunnyvale, a 198-unit multifamily/mixed-use community in downtown Sunnyvale. Located in three buildings along Washington and McKinley avenues, the Flats will offer a collection of one-, two- and three-bedroom apartments with numerous indoor and outdoor amenities above ground-level retail. Of the 198 homes offered, 25 will be designated as affordable.
STC Venture LLC is behind the project. STC is a joint venture between Sares Regis Group of Northern California and Hunter Properties. The Flats are the first completed apartments within the multi-phase CityLine Sunnyvale project. CityLine Sunnyvale aims to enliven downtown Sunnyvale as an active, pedestrian-oriented mixed-use district featuring new residences, a large public plaza, shopping, entertainment options and office space planned across 36 acres.
“We couldn’t be more thrilled to deliver these apartments to activate downtown, and provide new homes near jobs and transit,” says David NP Hopkins, chief operating officer at Sares Regis. “Sunnyvale residents have been waiting a long time for these buildings to be completed and occupied, and we’re excited to see them evolve into a thriving community for the benefit of this neighborhood. These will be ideal homes for workers and young families.”
Each of the homes features a five-burner gas stovetop, stainless steel Energy Star Whirlpool appliances, full-sized stacked washer and dryer, Quartz slab kitchen countertops with tile backsplash, Euro-style cabinetry with designer-selected hardware, kitchen island, walk-in closet, hardwood-style plank flooring, high-efficiency central heat and air conditioning, a private balcony or patio and a Nest thermostat.
Amenities include a fitness center and yoga studio, an indoor/outdoor play space, individual business studios, a dog spa, five outdoor courtyards with kitchens, barbecues, fireplaces and dining areas; and garage parking with EV charging stations.
The Flats are located in three separate buildings, directly above about 75,000 square feet of retail anticipated to be occupied in 2019. The development is also within one to two blocks of Sunnyvale’s Caltrain station and historic Murphy Avenue’s many shops and restaurants.
The Flats is part of phase one of the multi-phase CityLine Sunnyvale project currently underway. A new two-story building on the corner of Murphy and McKinley avenues is under construction that will house a Whole Foods Market and an AMC Theaters scheduled to open in 2019.
Some $20 million of public improvements are also underway, including the addition of landscaping and street trees, the installation of new traffic signals and the construction of landscaped traffic medians.
“The delivery of these apartments marks a major step in the transformation of downtown Sunnyvale into an active, vibrant community,” Hopkins tells GlobeSt.com. “Those who live at the Flats will have a convenient, walkable lifestyle at their fingertips—on top of the many amenities offered to residents, CityLine Sunnyvale will add new shopping and entertainment options to downtown Sunnyvale’s already vibrant scene, and Caltrain is just blocks away.”
STC Venture LLC is also completing design on an additional 94 residential units along Iowa Street, the entitlements for which were originally approved in 2007, with updated architecture approved in 2018. These include a mix of 75 apartments and 19 three-bedroom townhomes.
With few existing vacancies, most of the Bay Area’s apartment demand in this cycle went to areas that received the largest amount of new apartment units. And with each metro in the Bay Area being high barrier-to-entry markets, new supply was concentrated in only a handful of submarkets.
In San Jose, North San Jose/Milpitas registered notable absorption during the past eight years, with demand at about 8,500 units, while more than 9,300 apartments were delivered. That follows SoMa’s completion total as the Bay Area region’s second highest. Those additions represent a little more than half of existing stock in North San Jose/Milpitas, according to RealPage.
For more information on multifamily news, join GlobeSt.com at RealShare Apartments in Los Angeles from October 29-30, 2018. RealShare Apartments brings together the industry’s top owners, investors, developers, brokers and financiers as they gather for THE MULTIFAMILY EVENT OF THE YEAR! This conference leverages the strength of ALM’s Real Estate Forum and GlobeSt.com which report daily on the multifamily sector. Register for RealShare Apartments.