Firefighters from the Berkeley Fire Department were brought in to help battle the blaze.
The building damaged by the fire, located on the 300 block of Lester Avenue east of Lake Merritt, was several months away from being finished, according to the project's owner. The structure, with a mix of one- and two-bedroom units, was 80 percent completed, said Athan Magganas, manager of Adelphos LLC, the property's owner and developer.
"We're very saddened. It's a tragic loss of property," Magganas said. "I don't think I've come across anybody who did not feel sad today."
He said contractors on the project will be out of work.
"They come to do work today, and they see that all their effort has been blown up into flames," he said.
Magganas said losses from the fire could total $5 million.
"That is a lot of money, and we don't have it," he said.
Magganas said he hopes insurance will cover most of the costs and that work could resume on the project.
"We wish that we can get back in the process of rebuilding, but we do not know what we're faced with," he said.
Magganas speculated that several homeless people at the site overnight may have started the fire.
Chief Reed, though, emphasized that the fire is still under investigation and she would not suggest any potential causes.
PG&E said the blaze cut electricity to more than 300 customers. A utility spokeswoman said those customers lost electricity just after 6 a.m. and had it restored just before 11 a.m.
The blaze comes nearly four months after a five-story apartment building under construction in Emeryville was destroyed in a six-alarm fire, prompting an investigation by the federal Bureau of Alcohol, Tobacco, Firearms and Explosives.
KQED's Devin Katayama contributed to this report.
