Stockbridge Snaps Up SoMa Apartments for $64M as SF Multifamily Market Roars Back

Stockbridge Capital Group has acquired 923 Folsom, a 115-unit apartment building in San Francisco's SoMa neighborhood, for $64.3 million from a J.P. Morgan Asset Management affiliate — the latest signal that institutional capital is flooding back into a city that many investors had written off.

The nine-story building, completed in 2017 by Trumark Urban, was 97% occupied at the time of sale. At roughly $559,000 per unit, Stockbridge paid about 7% below the property's 2022 appraised value of $69.1 million — a modest discount that reflects the market's sharp recovery.

AI Boom Fuels Fastest Rent Growth in the Nation

San Francisco's multifamily market has undergone a dramatic reversal driven by the artificial intelligence sector. Vacancy has dropped to 4.6% — a 10-year low — while average asking rents have climbed to approximately $3,300 per month, with annual growth of 5.7% to 5.9%, the fastest pace of any major U.S. city.

The numbers are even more striking at the unit level. January 2026 data showed one-bedroom median rents up 16.1% year-over-year to $3,670 and two-bedroom rents up 19.1% to $5,010, driven by AI company expansion in neighborhoods like Mission Bay and SoMa.

Institutional Capital Returns

The Stockbridge deal is part of a broader wave. Trailing 12-month multifamily sales volume in San Francisco reached approximately $2.6 billion as of early 2026. The San Francisco Bay Area rose six spots to rank No. 3 in CBRE's 2026 North America Investor Intentions Survey, with institutional and REIT buyers accounting for roughly half of total transaction volume.

Limited new construction is compounding the supply-demand imbalance. Analysts project that supply-constrained West Coast markets could see 20 to 30 basis points of cap rate compression as institutional capital continues to pour in.

The shift marks a remarkable turnaround for a city that experienced significant population loss and rising vacancy during the pandemic years, only to see the AI industry — led by companies like OpenAI, Anthropic, and a rapidly expanding ecosystem of startups — drive a housing demand surge that has outpaced every other major metro in the country.