At the end of last year, San Francisco remained the only major market of nearly 70 tracked by CBRE in which residential rents had not recovered to their pre-pandemic levels.
Now, with rents flattening and vacancies rising in over-supplied Sun Belt markets, San Francisco’s recovering multifamily sector is looking like a good bet for investors with deep pockets.
Several major players are moving to grow their apartment portfolios in the city as San Francisco’s developing downtown recovery spurs optimism that its commercial real estate fundamentals are regaining their footing.
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Over the last eight months, Fortress Investment Group has assembled a 100-unit apartment portfolio in San Francisco. The New York-based private equity giant has spent more than $33M to acquire six apartment buildings in the city.
This month, Fortress scooped up 1048 Union Street, a 22-unit building, for $9.5M. And since the beginning of the year, Fortress acquired 1249 18th Avenue, an 18-unit building, and 95 Cervantes Boulevard, a 15-unit building, with each transaction costing about $6M.
Fortress is also positioning itself to acquire a 12-unit building at 452 Oak Street in Hayes Valley, acquiring the debt backed by the building in February and serving existing ownership with a notice of default as a prelude to acquiring the building through foreclosure.
Washington, DC-based Artemis, which has about $11B in assets under management, is following suit in growing its San Francisco portfolio as well. This month, Artemis and partner Presidio Bay Ventures acquired the 121-unit Olume Apartments at 1401 Mission Street for nearly $40M, or close to $330K per unit.
In September, Texas-based developer Hines purchased a ground lease for the 87-unit Duboce Apartments at 181 Sanchez Street from Greystar for $38M, or about $437K per unit. Los Angeles-based investor JRK Property Holdings acquired 333 Fremont Street, an 88-unit property, for $44M, slightly more than $500K per unit.
San Francisco’s multifamily market is experiencing renewed strength in 2025, marked by falling vacancies and steady rent growth, according to a market report from JPMorgan Chase.
“San Francisco’s performance is trending up, with vacancy at its lowest levels since 2019,” said David Diggs, senior regional sales manager with JPMorgan Chase. “The market’s lifestyle and jobs continue to draw renters.”
San Francisco’s average rent, as of Q1 2025, is $3,200 per month, a 2.7% increase year-over-year. The citywide vacancy rate has dropped to 5.5%, the lowest rate since Q4 2019, IPG reported.
“Demand is rising, construction is slowing and rent growth is gaining momentum,” IPG’s multifamily market report said.
Transaction activity picked up in the second half of 2024, with institutional investors coming back into the market and multifamily sales in San Francisco reaching $1.6B over the trailing 12 months, according to CoStar data.
Despite the growing interest of large investors, opportunities to acquire multifamily buildings in San Francisco at an institutional scale remain limited.
In the post-pandemic era, only two large portfolios have traded hands: a 2,149-unit portfolio acquired by Brookfield and partner Ballast Investments last year, and a 300-unit portfolio bought by Baupost Group and Prado Group in the fall of 2023.
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