I took a fresh system and it had openssh-server installed right away (as it is 
part of all the base images).
/var/run/sshd was at 0755 root:root already

I was wondering if the package install would kill the permission/ownership, so 
I did
  $ apt install --reinstall openssh-server
But things stayed fine.

Ok, then I purged the package and removed the path to then install it from 
  $ apt remove --purge openssh-server
  $ rmdir /var/run/sshd
# ensured that /var/run/sshd really doesn't exist anymore
  $ apt install  openssh-server

The path is back and permissions are ok.

I can't find how you got into this situation :-/
I'm puzzled:
- from what to what do you upgrade trusty -> xenial or just a package version 
in xenial?
- do you have any idea where the bad permissions on /var/run/sshd might come in 
your case?
- if you follow my second example of purge, rmdir, install does the path get 
created correctly on your system?

** Changed in: openssh (Ubuntu)
       Status: New => Incomplete

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Touch seeded packages, which is subscribed to openssh in Ubuntu.

  sshd does not start after update

Status in openssh package in Ubuntu:

Bug description:
  After processing system update by:
  apt-get clean && apt-get autoclean && apt-get autoremove && apt-get update && 
apt-get upgrade && apt-get dist-upgrade && reboot

  ssh server stops starting at system boot.

  It starts after doing:
  mkdir /var/run/sshd
  chmod 0755 /var/run/sshd
  service ssh start

  It happens on fresh Ubuntu-16.04 installs on every VPS provide I have
  tested so far.

  ProblemType: Bug
  DistroRelease: Ubuntu 16.04
  Package: openssh-server 1:7.2p2-4ubuntu2.6
  Uname: Linux 2.6.32-042stab127.2 x86_64
  ApportVersion: 2.20.1-0ubuntu2.18
  Architecture: amd64
  Date: Thu Jan 31 10:18:56 2019
   PATH=(custom, no user)
  SSHDConfig: Error: command ['/usr/sbin/sshd', '-T'] failed with exit code 
255: Missing privilege separation directory: /var/run/sshd
  SourcePackage: openssh
  UpgradeStatus: No upgrade log present (probably fresh install)

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