The Vacant-Unit Premium: What San Francisco Small-Building Buyers Paid in 2026

Vacancy mentioned

$753,473

2026 median building sale price per unit; 218 sales

No vacancy mentioned

$581,692

2026 median building sale price per unit; 262 sales

Difference in medians

29.5%

$171,781 per unit; rounded to 30%

Data: Aggregated SFAR data, 2026. Full calendar years 2022–2025; 2026 through October. The October cutoff day is not specified.

A vacant apartment can give a buyer something difficult to purchase separately: room to choose the next use. That may mean leasing after improvements, occupying the apartment, or carrying out a documented renovation plan. The SFAR comparison is consistent with buyers valuing flexibility. It does not isolate what one vacant apartment is worth, prove why a building sold at its price, or justify paying 30% more for any property.

1. What the SFAR data actually shows

Price per unit means the building sale price divided by its unit count, followed by the median within each group. The $171,781 difference applies to the medians of that building-level measure. It is not the sale price of a vacant apartment and not the amount of extra annual rent. The classification is “vacant unit mentioned” versus “no vacant unit mentioned,” not a verified census of occupied and empty apartments.

The gap was 17.4% in 2022, 11.2% in 2023, 30.4% in 2024, 13.4% in 2025, and 29.5% in 2026 through October. This is not a steadily rising premium: 2024 also had a roughly 30% gap. Compared with full-year 2025, the 2026 vacancy-mentioned median is 19.6% higher, while the other cohort is 4.7% higher. Different transaction mixes and a shorter 2026 period can affect both comparisons.

2. Why usable vacancy can matter to an investor

• Income flexibility: a legally available apartment may be leased at a supportable initial rent, subject to the unit’s tenancy history and applicable restrictions. Verify the actual rent-setting position rather than assuming vacancy removes every restriction.
• Renovation access: an empty apartment may make a planned scope easier to schedule. Permits, legal use, building systems, cost, and neighboring tenants still matter.
• Owner occupancy: a buyer may be able to live in a genuinely available apartment and rent the others, subject to the financing and possession terms.
• Execution control: an existing, usable vacancy can reduce dependence on a future tenant move-out. The apartment may still need work before it can generate income.

These are reasons a buyer might value flexibility, not causal findings from the chart. California’s Attorney General explains that landlords may generally establish an initial rent when tenants move out and new tenants move in, while also describing restrictions and protections that can apply. San Francisco tenancy history, prior notices, agreements, and legal-use questions require property-specific review. Start with the current documents, not a marketing phrase. [1]

For an owner-occupant, the economics are different from an all-rental investment. An apartment you occupy does not produce cash rent. Compare the household housing benefit and the remaining rental operation separately. Our house-hacking guide walks through that structure, including Caley and Lucas’s Linden Street experience. [4]

3. Turn the premium into an underwriting question

Do not multiply $171,781 by a building’s unit count and call the result its vacancy value. The two medians pool different neighborhoods, unit sizes, building sizes, conditions, and income profiles. Instead, compare similar buildings and model the actual change in sustainable net operating income, along with upfront costs and timing.

At a 6.0% capitalization assumption, the same $33,600 supports $560,000 before initial costs, or $410,000 after the illustrative $150,000. That $112,000 difference comes from one changed assumption. Neither result is a recommended acquisition premium: account for time to stabilize, carrying costs, tax changes from acquisition, financing, remaining capital work, and a return for execution risk. If the alternative apartment already earns rent, compare the net income difference, not the full $48,000.

The income and comparable-sales approaches should check each other. A desirable vacancy may support an owner-occupant’s housing plan even when a pure rental model is less compelling. Conversely, a fully leased building with durable income can be the better investment at the right basis. Our multifamily underwriting and financing guides help separate those cases. [5, 6]

4. What to verify before paying for vacancy

San Francisco’s Housing Inventory records include occupancy and vacancy history, but a filing is one input rather than a substitute for lease and possession review. The city also regulates tenant buyout agreements; its published data describes pre-negotiation disclosure and filing requirements. Do not assume an occupied apartment can be made vacant on your preferred schedule or budget. [2, 3]

A vacant apartment also does not establish TIC sale feasibility, condo-conversion eligibility, or permission for additional units. Underwrite those as separate projects. Review our TIC conversion and multifamily ADU guides before assigning them value in a purchase model. [7, 8]

5. San Francisco Real Estate Company Perspective

We see usable vacancy as an option worth investigating, not a shortcut to a good return. Our investment thesis is that selected San Francisco multifamily buildings offer upside through renovation and permitting, appropriate ownership strategies, and strong property management. The opportunity depends on buying at a basis that leaves room for the work, the time, and a realistic exit.

Caley and Lucas would start with three cases: the building as it stands, the plan after documented work and leasing, and a downside with lower rent, higher costs, and a longer timeline. We would compare similar occupied and partially vacant buildings before deciding what extra flexibility is worth. The SFAR finding helps frame the question. The individual building has to answer it.