Ruegg & Ellsworth LLC has sold a 0.3-acre site for the development of a 232-bed student housing community in Berkeley, Calif. CBRE‘s Oakland office brokered the $21.5 million transaction on behalf of the seller.
The buyer plans to build an eight-story off-campus asset that will encompass 87 units equipped with high-speed internet, ground-floor retail, a rooftop terrace and 40 bike parking spaces.
Located at 2590 Bancroft Way, the property will be half a mile away from the center of the UC Berkeley campus and within a mile of downtown Berkley and Edwards Stadium, offering easy access to various retail, entertainment and dining options.
Strong market fundamentals
Berkeley remains one of the most attractive markets in the country because of the increased rent demand and limited supply in the Southside area, mentioned Keith Manson, senior vice president of CBRE, in a prepared statement. Due to the growing demand for student housing and investors’ interest in big university markets, the sales price reached more than $247,000 per entitled unit, surpassing the previous price record set in the area by 26 percent.
The latest Yardi Matrix report states that some of the most expensive rent rates for student housing are in markets with a high cost of living. Unsurprisingly, California universities offer some of the most costly student housing rents per bedroom in the country.
Communities near top universities are expected to perform well, as rent rates are nearing pre-pandemic levels, reaching a 2.2 percent growth year-over-year in December, slightly below the 2.4 percent rate recorded in 2019.