Developers Target Silicon Valley's Multifamily Market as AI Demand Spikes

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Developers are targeting Silicon Valley's multifamily sector, with AI demand expected to drive short-term rent growth.

A major move in the market includes Keech Properties purchasing Sunsweet Apartments, an 87-unit multifamily property in Morgan Hill, Calif., for $45 million from Morgan Hill Development.

Northmarq's Walnut Creek Investment Sales team, led by Anthony Pappageorge and Zach LeBeouf, brokered the sale of the asset at 90 E. 3rd St. that was originally built in 2020.

"The Silicon Valley rental market has been tightening as we see AI Tech sector growth increase quarter over quarter," Pappageorge told GlobeSt.com.

"With limited new supply in the pipeline, we expect to see strong rent growth as we move into the fourth quarter and beyond."

Sunsweet Apartments is on a 1.88-acre site and encompasses 81,324 square feet, situated in Silicon Valley's southern corridor.

The community features a mix of studio, one- and two-bedroom apartment homes with stainless steel appliances, modern finishes, in-unit laundry and walk-in closets.

Its amenities include a resort-style swimming pool, fitness center, clubhouse, EV charging stations and multiple outdoor gathering spaces. The property also has roughly 8,000 square feet of ground-floor retail space.

A variety of dining, retail and entertainment destinations are nearby.

Other Projects Taking Shape In Morgan Hill

Over the past year, one of the most notable apartment developments in Morgan Hill has been Vida at Morgan Hill, a new 389-unit luxury apartment community located at 18303 Alpera Lane.

The property includes one- and two-bedroom apartments, as well as amenities that feature a pool, fitness center, coworking space, clubhouse, cabanas and community green spaces.

MBK Rental Living developed the project, which represents a significant addition to the local rental housing supply.

Another major project is The Magnolias, a 66-unit affordable housing development at 17965 Monterey Road.

The community is planned as 100% affordable housing and includes units for low-income households, farmworker families, veterans and people experiencing or at risk of homelessness.

The development will provide studios, one, two and three-bedroom apartments along with amenities such as a community room, computer lab, rooftop terrace, garden, fitness area and playground.

Morgan Hill also continued to see activity around existing apartment properties. The Sunsweet Apartments, an 83-unit community at 90 East Third Street near the Morgan Hill Caltrain station, changed ownership in September 2026. The complex, which includes ground-floor retail space, was acquired by Redwood City-based Keech Properties.

These developments reflect ongoing efforts to expand both market-rate and affordable housing in Morgan Hill as the city works to meet its long-term housing production goals.