Goldman Sachs Buys Student Housing in Berkeley for $112M

A unique student apartment complex in Berkeley featuring a sculpted limestone façade that resembles the walls of a castle has been purchased for $112.9M by a Goldman Sachs affiliate in an all-cash deal, according to Alameda County records.

Enclave Apartments, a 55-unit student housing complex located at 2503 Haste Street, was sold by a group headed by Irvine-based LBA Realty and Point Richmond-based West Builders, according to a report in SiliconValley.com.

The seven-story building on the corner of Haste and Telegraph Avenue, is within walking distance of the UC-Berkeley main campus. The mixed-use asset has five ground-floor retail units.

The student apartment building is a local landmark due to the unique exterior of the lower floors, which are covered with stone that has been sculpted to resemble cliffs, rocks and crags as well as castle walls reflecting Tudor and Moorish designs.

The top half of the building evokes an Italian village perched on a cliff, according to the designer, Walnut Creek-based LCA Architects. The building, which has a capacity of 254 beds, offers upper and lower terraces and gathering areas that resemble courtyards.

The recovery of the student housing sector continues to pick up steam after a pre-pandemic slide, with the average rent per bedroom for fall 2022 at $777, an increase of 3% YoY, GlobeSt.com reported.

Pre-leasing of student housing has been strong this year, tamping down concerns that a shift to online learning during the pandemic would become the new normal.

According to a Yardi Matrix survey of 200 schools at the end of April, preleasing for next fall was recorded at 63.7%, which is 13.5% higher YoY and nearly 10% higher than the pre-pandemic level in March 2019.

While students are returning to occupy student housing in Berkeley and elsewhere, many of their professors are having a tough time finding affordable housing in Silicon Valley.

According to a recent report in the San Jose Spotlight newspaper, housing prices in the Bay Area are so prohibitive, cities including Palo Alto, Santa Clara and Los Gatos are investing in teacher housing.

The Alum Rock Union School District is putting a bond measure on the ballot in November to fund a $27M housing project for teachers.

In Santa Clara County, the median home price topped $1.97M, according to the California Association of Realtors. The median single-family home price in San Jose has risen by more than 23% this year, CAR reported.

Nationally, student housing continues to attract CRE players. Inland Private Capital (IPC) and Core Spaces recently launched a strategic joint venture targeting purpose-built student housing at top-tier universities across the US, GlobeSt.com reported.

Core Spaces owns and/or operates 44 student housing properties nationwide with a total of more than 22K beds, with an additional 40K in the pipeline.