East Bay apartments are bought in deal that points to soft real estate market

DUBLIN — A big apartment complex in Dublin has been bought for $45 million-plus in a deal that hints at weakness in some segments of the Bay Area residential real estate market.

Tralee Village Apartments in Dublin has been bought by an affiliate of CityView, a veteran real estate investment and development firm.

The CityView affiliate paid $46 million for the 130-unit apartment complex at 6599 Dublin Boulevard in Dublin, according to documents filed on June 18 with the Alameda County Recorder’s Office.

“Tralee Village was a prime opportunity to acquire a well-located, high-quality asset in a highly sought-after submarket that has experienced significant population and employment growth since the pandemic,” said Sean Burton, CityView’s chief executive officer. The deal was arranged through Jason Parr, a senior managing director with Berkadia, a commercial real estate firm.

The $46 million price, however, suggests that some weakness has crept into the Bay Area’s residential real estate market at a time of skyrocketing interest rates and soaring inflation.

In 2017, JB Matteson, a San Mateo-based real estate investment firm, paid $55 million for Tralee Village Apartments, county public records show.

This means that the Tralee Village apartment complex is worth about 16% less than it was seven years ago.

In the wake of the spike in interest rates and inflation, Bay Area apartments are selling for somewhat less than before the surge in rates and consumer prices, based on a non-scientific survey of high-profile deals involving multifamily properties in the region.

After the jump in interest rates, the average price for apartment buildings that were sold was $520,700 per unit, based on selected Bay Area transactions that were completed in 2024 and in the final three months of 2023.

This news organization’s spot check of large apartment transactions in the South Bay and East Bay suggests that per-unit values in 2024 are running roughly 5% below the values that were common before the spike in interest rates materialized during 2023.

With interest rates soaring, apartment buyers find it tougher to justify purchases unless the prices are sufficiently low for the residential complexes. That’s because the monthly mortgages will be expensive if the buyer obtains a loan to finance the purchase.

Despite some of the uncertainties that swirl around Bay Area real estate, CityView believes the Tralee Village complex offers plenty of upside.

“With a 95% average historical occupancy and robust market fundamentals, Tralee Village fits squarely in our strategy of acquiring communities in supply-constrained markets with high barriers to entry at significantly below replacement cost,” Burton said.