The CBRE Q4 2022 Bay Area Multifamily Report is out and once again there’s good news for investors in downtown San Jose. Year-over-year rents were up 10.5% as demand for living space remained strong.
“Absorption” – a fancy way to describe an apartment unit that’s taken off the market by a renter, stood at 97% of new supply year-to-date (about as good as you can get because there’s always turnover). That’s a good number. San Jose had the second-highest absorption to deliveries ratio of any city in the country. Another way of putting this is that vacancies are low because people want to live here.
While rents are up and demand is strong, supply has remained relatively constrained. When it comes to new construction, the CBRE report found that Central San Jose ranked #14 nationally. From an investor’s point of view, that’s a good number, too, because it reduces the chance for overbuilding.
We’ve talked about the demand side for multifamily in other blogs. Millennials have named San Jose their #1 destination city, according to one report. U.S. News ranks San Jose #5 in its annual “Best Places to Live” survey. The unemployment rate in the San Jose-Sunnyvale-Santa Clara MSA stood at 2.2% in September, well below the national average.
We’ve seen the need for quality multifamily housing in San Jose and are working hard to address it. Our Echo is a 389-unit residential building in the heart of downtown. It’s a part of our Fund II, currently open to investors. TMBR, a part of our Fund I, is bringing another 250+ residential units to San Jose. It, too, is downtown adjacent to Google’s future mega-campus and Diridon Station, the largest transit hub on the West Coast.
There are a lot of good things happening for multifamily housing in downtown San Jose as the latest CBRE market report confirms. To find out how you can be a part of it, contact us today.
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