Pasadena-based developer Gemdale USA secured $94.3 million in construction financing for a 189-unit multi-housing development in the East Bay suburb of Pleasant Hill, according to Brandon Roth, broker at JLL who represented the borrower. The development comes as the East Bay multifamily market has maintained stability despite other Bay Area markets experiencing turbulence.
“Gemdale is replacing an obsolete office building that sat vacant for years with 189 units of high-quality housing that is desperately needed in this area,” Roth said. “Given the lack of developable sites, the community in downtown Pleasant Hill hasn’t benefited from new apartments in over 30 years.”
Located at 85 Cleveland Road, the property will be situated in downtown Pleasant Hill and across the street from 350,000 square feet of retail stores, restaurants and movie theaters. Once completed, the building will offer amenities including a fitness center, clubroom, a rooftop and meeting rooms.
This comes on the heels of another 71-unit building in Pleasant Hill selling for $326,000 per square foot that will be converted into affordable housing. Walnut Creek also recently approved the development of a 136-unit senior living facility that serves a high demand in the city.
With relatively affordable rents compared to nearby alternatives, East Bay’s residential market has remained steady, as other markets, such as San Francisco and San Jose, have experienced much more fluctuation, according to a report by Marcus and Milichap. The average monthly rent in the East Bay rose to $2,662 per-unit in the second quarter, which is an increase of 8 percent from a year earlier. In-migration and moves from other Bay Area markets to a low-cost option explain the strong market, the report found.
The rise in rents has not led to more vacancies. The East Bay saw a vacancy rate of 2.5 in the second quarter, down from 4.1 percent the same time last year.
Gemdale USA is the U.S. operation of Gemdale, a large development and construction company headquartered in Shenzhen, China.
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