Rents on the Rise: San Francisco’s 5+ Unit Market Holds Strong in Q2 2025
The San Francisco 5+ unit apartment building market remained on solid footing in Q2 2025 as rental rates continued to climb, bolstering investor confidence. Twenty-three transactions closed during the quarter, up from 18 in the same period last year, with the average price per unit at $330,500 and median cap rates holding steady at 5.22%. Prime neighborhoods such as the Mission, Hayes Valley, and Russian Hill saw strong demand, while properties in outer districts experienced longer marketing periods. Many sales were driven by buyers executing 1031 exchanges, underscoring continued portfolio repositioning in the multi-family sector.
With rents trending upward and vacancy rates remaining low, the outlook for the second half of 2025 is optimistic. Elevated interest rates compared to pre-2022 levels have been offset by stable pricing and income growth, creating an appealing environment for well-capitalized investors. Properties in desirable locations with solid in-place income are expected to remain highly competitive, as rental growth strengthens long-term return potential.
Want to stay in the know for all things mixed-use, multi-unit, and commercial properties in San Francisco? Join the newsletter today for regular market updates!
