An eight-unit apartment building at 2537 Fulton St. recently sold for $3.825 million, making the individual price for each apartment – $478,125 – the highest in Berkeley for buildings constructed before 2000, according to those involved with the deal.
The Kuwait Real Estate Company, also known as AQARAT, sold the building in late May to an undisclosed local buyer who paid all cash, Guy Nesdale, a partner in the private equity firm, Empire Square Group, which manages some of AQARAT’s assets, told RegistrySF.com. AQARAT is one of Kuwait’s largest real-estate companies, and the first to have shares traded on the stock exchange, according to its website.
“The price escalation in the local Berkeley market made this an opportune time to divest of property,” Fahad Al-Shamlan, vice president for investments and acquisitions at AQARAT, said in a press release. The release also said the sale was record-setting.
“Student-occupied assets continue to command strong rents,” said Keith Manson, the commercial broker for CBRE Group, which found the buyer, according to SFRegistry.com.
2537 Fulton St., between Blake and Parker streets, was built in 1968 and was completely remodeled in 2013, according to the press release. The building was seismically upgraded, which removed it from Berkeley’s soft-story inventory list. New stainless steel appliances were installed in the kitchens, among other work.
Real-estate agents around town not connected with the sale could not confirm that this was the highest price ever paid for this kind of apartment, as the sellers claim. However, they said it is very possible.
The high price is a reflection of the fact that this property is probably viewed as a stable investment, said Steve G. Smith, a partner at Norheim & Yost. The rents are stable since students are always looking for apartments close to campus, turnover is low (but regular), and expenses are limited.
“If you were to ask me how the commercial market was, I’d say something like, “well, office and retail are more or less stable. Industrial is more competitive with vacancy rates low, but the apartment market is nuts….friggin’ nuts,’” said Smith.
There is a lot of outside money looking to purchase property in Berkeley which is driving prices higher, said Jonathan Davis of Coldwell Banker. And there is a not a lot of this kind of inventory for sale. The property has seven two-bedroom units and one penthouse unit. Buildings with two-bedroom apartments generally command more than those with smaller units, said Davis.
“There are a lot of people who will pay a premium to buy a building near the campus, specifically the south side of campus,” said Davis.
The new buyer is from Alamo, according to Davis.
Related:
Landmark Claremont Court mansion on market for $5.45M (06.24.16)
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