As the pandemic crippled many parts of the economy, apartments, for the most part, continued to do well over the last year, even as single-family housing rocketed to levels not seen in more than decade.
But for multifamily, the good times weren’t universal. The city core in Sacramento saw rents actually dip slightly, possibly as a result of several large properties coming online at once. And in Davis, remote learning for University of California Davis students translated into a vacancy rate that jumped to 12%.In the next few months, new properties in each of those markets will test whether those factors were blips, or something more substantial. Truckee-based HighBridge Properties will open Ryder on Olive, a 706-bed, 130-unit student housing project to Davis. And leasing has begun for The Strand, a 408-unit apartment project in West Sacramento not far from Downtown Sacramento.
Ken McCarren, vice president of asset management with Irvine-based MBK Rental Living, said The Strand has a more spacious, suburban-style layout and doesn’t feel like an urban project.
“We’re very different from the downtown market,” he said. “You can bike to downtown, but the feel is very suburban.”
HighBridge Managing Director Paul Gradeff said Ryder on Olive is being marketed in a way that recognizes the pandemic. Common area designs were changed to have more space, to allow social distancing, for example.
Of Ryder on Olive’s 706 beds, 71 will be rented at lower rates – call it affordable student housing — in perpetuity. That was part of an agreement HighBridge made with the city during entitlement review. But Gradeff said that also recognizes student housing in Davis is often in short supply, making rents higher. For at least a few students, lower rents will be an incentive to stick around if in-person learning went remote again.
“In terms of what we’re offering, it’s 20,000 square feet of common space. It’s a community within a community,” he said. In the long run, Davis still needs more student housing, he added.
McCarren with MBK said his firm is also thinking about adding more supply, including locally. Even so, he said, he’d acknowledge the current challenges.
“To come in with 408 units in a market takes a little bit of faith,” he said. www.livestrand.com