AvalonBay Communities is set to sell the Sunset Towers apartment complex in San Francisco’s Inner Sunset neighborhood. Bridge Capital Partners has agreed to purchase the twin towers, located at 6-8 Locksley Avenue, for an undisclosed amount. The San Francisco Business Times reported that AvalonBay had listed the 243-unit property earlier this year and received offers exceeding $100 million. The transaction is expected to close in January.
This sale reflects a broader recovery in San Francisco’s apartment market as demand increases. Data from Avison Young, cited by the Business Times, shows that investment in multifamily properties has risen more than 35 percent compared to last year, with absorption rates returning to levels seen in 2022.
With few new market-rate developments underway across San Francisco, investors are concentrating on existing buildings in neighborhoods with limited supply such as the Inner Sunset. More than 20,000 housing units citywide remain stalled due to project delays or cancellations. In 2024, only 1,453 residential units were completed and applications were filed for 2,541 new homes—a decline from over 5,000 delivered in 2020, according to data from the San Francisco Planning Department.
Both demand and rents have been rising in San Francisco. AvalonBay COO Sean Breslin attributed this trend partly to an influx of tech workers moving into the city as artificial intelligence companies expand their presence. “AI is certainly a big part of that,” Breslin said in May regarding increasing rental prices.
AvalonBay president and CEO Benjamin Schall told investors in September that sales throughout its portfolio could grow as rents and property values rise. During AvalonBay’s third-quarter earnings call, company executives emphasized that demand remains strong in coastal markets like San Francisco because of highly educated and well-paid workers employed in AI and related sectors.
AvalonBay currently owns nearly 3,400 apartments valued at about $1.2 billion across San Francisco.
