Press & Media

Philip Batlin of Marcus & Millichap is pleased to announce the sale of two Russian Hill apartment buildings at 1159 Union Street and 1067 Union Street in San Francisco for $6,250,000, or about $568,000 per unit. The 11 unit portfolio, with 9 parking spaces, had been owned by the same family for more than 50 years. Batlin and Clinton Textor represented the seller and procured the buyer, Ballast. 1159 Union Street is a 1925 building with six full floor flats, two per level, over a six car garage with rear access from Warner Place. One block away, 1067 Union Street is a 1908 property with five flats over a three car garage, on a through lot with frontage on both Union Street and Macondray Lane, the hidden pedestrian lane that inspired Barbary Lane in Armistead Maupin's Tales of the City. Neither building had been offered for sale in more than 50 years. The team marketed them individually and as a portfolio and generated multiple offers on each. Selling both to one buyer gave ownership the strongest overall result, and the deal closed at 99% of the combined asking price. "This was the first time either property had been brought to market in more than 50 years, creating a rare opportunity to acquire two well located Russian Hill assets from a long term owner," said Batlin. The sale was handled by Philip Batlin, Managing Director Investments, and Clinton Textor, Senior Managing Director Investments, both of Marcus & Millichap's San Francisco office.

Capital is moving back into San Francisco and San Mateo County apartments. The market recorded 413 transactions over the past 12 months, roughly $2.6 billion across 392 properties and 11,200 units, well ahead of the $2.1 billion ten year average. Market pricing now stands at $556,119 per unit, up from $519,439 a year ago, while the market cap rate has edged down to 4.54%. The transaction data tells a more grounded story. Deals closed an average of 5.8% below asking price, the average transaction cap rate was 5.6%, average price per unit on actual trades was $236,200, and the typical deal was a 27 unit building that was 93.8% leased at close. The gap between market level pricing and what buildings actually trade for is the number most owners get wrong. Philip Batlin, Managing Director Investments at Marcus & Millichap, shares the Q3 2026 capital markets report covering pricing trends, buyer and seller composition, submarket sales activity and the most active buyers in the market.

San Francisco's apartment market is as tight as it has been in years. Vacancy across the 191,657 unit market closed the third quarter of 2026 at 3.6%, well below the 5.2% long run average, and asking rents climbed 12.7% over the past 12 months to $3,751. Net absorption of 2,552 units ran far ahead of the 628 units delivered, and with only 4,121 units under construction, relief on the supply side is not coming soon. Investors have noticed. Sales volume reached $2.7 billion over the trailing 12 months against a $1.6 billion historical average, and market participants report cap rates roughly 75 basis points tighter than two years ago. Recent trades ran from Carmel Partners' $174 million sale of the 320 unit Towers at Rincon at $544,000 per unit, down to value add plays such as the 117 unit Terraces Apartments on Bush Street at $214,000 per unit. Philip Batlin, Managing Director Investments at Marcus & Millichap, shares this quarter's report for Bay Area apartment owners deciding whether to hold, refinance, or sell.