While Proposition 10 — California’s proposal to strengthen rent control — was defeated last November, it somewhat stifled the multifamily investment sector in San Diego as investors worked to figure out the next wave of opportunity. But now that market is starting to bounce back. Total multifamily sales volume in 2018 was just under $2 billion. However, several signs pointed to a resilient San Diego market, including cap rates holding steady at 4.6 percent and an increase in pricing. The tides have begun to turn in the past few months, with numerous apartment deals on the market — more than we’ve seen at one time in the past few years. This is especially true in Downtown San Diego where a significant number of new merchant-built deals are expected to come to market, continuing throughout the year. These are luxury complexes, with some expected to fetch as much as $600,000 per unit. Six conventional multifamily sales (with at least 100 units) closed in the first half of this year, totaling $550 million. This is an increase over the four sales totaling $372.5 million in the first half of 2018. The median price per unit through mid-year was $258,200, although roughly one-quarter …
LANCASTER, CALIF. — Berkadia has secured $108.7 million in acquisition financing for Afton Property’s purchase of Sunset Ridge Apartments, an 800-unit, mixed-income, garden-style multifamily community in Lancaster. Berkadia originated the 15-year, fixed-rate loan, which was purchased by Freddie Mac. The financing features eight years of interest-only payments through Freddie Mac’s Targeted Affordable Housing program. Mitch Sinberg, Matthew Robbins and Abigail Beauchamp of Berkadia’s Boca Raton, Fla., office secured the financing for the Los Angeles-based borrower. Built in four separate 200-unit phases between 1986 and 1988, Sunset Ridge features 800 units in a mix of one-, two- and three-bedroom layouts with fully equipped kitchens, pantries, dishwashers and ceiling fans. Community amenities include a laundry facility, on-site maintenance, a fitness center and swimming pool.
TORRANCE, CALIF. — Rexford Industrial Realty has purchased an eight-building industrial portfolio in Torrance for $66.2 million, or $247 per square foot. The acquisition was funded using cash on hand. The name of the seller was not released. Comprised of four single-tenant buildings and four two-tenant buildings, the asset offers a total of 267,503 square feet of industrial space on 14.2 acres. At the time of sale, the complex was 91 percent leased. Rexford plans to complete capital improvements at the property, including fire sprinkler upgrades, modernization of offices and other functional enhancements.
CHULA VISTA, CALIF. — The Mogharebi Group (TMG) has arranged the sale of Pacific Pointe Active Senior Living, a 111-unit active adult community in Chula Vista. A San Gabriel Valley-based private investor sold the community to a Los Angeles-based buyer for $12 million. Pacific Pointe is in downtown Chula Vista, located between San Diego and the border of Mexico. The property is within a mile of Scripps Mercy Hospital Chula Vista, Interstate 5 and over 1 million square feet of retail. “Due to the location and quality of this property, the potential buyer pool was significant in size,” says Otto Ozen, executive vice president of TMG. “To maximize the value of this community, we aggressively marketed it to our list of high-net-worth private clients who are currently looking for [1031] exchange up-legs.” Alex Mogharebi and Ozen of TMG represented both the seller and buyer.
SAN FRANCISCO — CBRE has arranged the sale of an office building located at 747 Front St. in San Francisco’s Jackson Square district. Polidev sold the asset to Bridgeton Holdings for an undisclosed price. Built in 1909, the four-story, 85,500-square-foot property has undergone substantial creative improvements in recent years, including open floor plans and expansive windows that showcase the 12- to 15-foot clear heights. The property also features a private roof deck with 360-degree views of the San Francisco Bay. At the time of sale, the property was 100 percent leased to a diverse tenant base, including Minted and Funding Circle. Kyle Kovac, Mike Taquino, Russell Ingrum, Mandy Lee and Giancarlo Sangiacomo of CBRE’s San Francisco office represented the seller. Mike Walker, Brad Zampa and Megan Woodring of CBRE’s San Francisco office arranged $54.9 million acquisition loan for the buyer. The five-year, non-recourse loan features full-term interest-only payments and a floating rate.
The San Diego industrial market is still thriving under sunny skies. The 146-million-square-foot industrial base is more than 95 percent occupied. Businesses continue to gobble up space even though rents have grown 6 percent to 8 percent annually since 2015. Though industrial markets around the country continue to do well thanks to a rapidly expanding logistics sector, San Diego’s industrial growth is broader based. Major contributions come from the defense, tech, electronics, cross-border commerce and biotech sectors. San Diego has several large submarkets, each with its own set of opportunities and challenges. South County, which includes Otay Mesa, has seen the strongest rent growth during the current economic recovery. Since the beginning of 2018, more than 591,000 square feet of state-of-the-art distribution space has been completed, with all but 45,000 square feet fully leased up. Recent transactions in Otay include a 198,000-square-foot lease to Zucarmex and the 174,000-square-foot expansion of US Joiner Trident Marine. The vacancy rate for South County stands at 4.33 percent, slightly under the countywide rate. Vacancy in North County is running somewhat higher at 6.72 percent. This is mainly due to recent deliveries in Carlsbad. A little more than 2.2 million square feet of new space …
TEMECULA, CALIF. — C.W. Driver Cos., as general contractor, has started construction of Mt. San Jacinto College’s (MSJC) new $43.3 million, 350,000-square-foot Temecula Valley Campus in Temecula. The project consists of a seismic retrofit and tenant improvement of an existing office building, creating a new campus and addressing current classroom shortages. The building’s twin five-story, 175,000-square-foot towers will be converted from office space into classrooms, laboratories and offices to serve MSJC students. The fifth floor will be entirely lab space. Other upgrades will include a kitchen, fitness center and lounges for students and faculty use. Located at 41888 Motor Car Parkway, the first phase of the 27-acre campus includes all seismic retrofits and full build-out of three floors. The phase is slated for completion in time for the fall 2020 semester. The second phase is scheduled for completion by summer 2021. PMSM/Nineteen Six Architects is serving as architect for the project. MSJC acquired the property from Abbot Laboratories with Measure AA facilities bond funds, which were approved to fund improvements to existing facilities and purchase new assets to accommodate increasing student enrollment.
SAN DIMAS, CALIF. — HCT Logistics Co., a Taiwan-based logistics and investment company, has purchased an office building located at 955 Overland Court in San Dimas. 955 Overland Venture LLC sold the asset for $19.9 million. Totaling 87,210 square feet, the two-story property was fully leased at the time of sale. Current tenants include the County of Los Angeles, United Nurses of California and Med-Legal. Mark Shaffer, Anthony DeLorenzo, Gary Stache, Doug Mack, Mark Perry and Carlene O’Neil of CBRE represented the seller in the all-cash transaction.
SAN DIEGO — Noble House Hotels and Resorts, a hotel ownership and management group, has completed a $21 million renovation of the Hilton San Diego Resort & Spa, located at 1775 E. Mission Bay Drive in San Diego. Overlooking Mission Bay, the resort features 357 rooms and suites, an American cuisine restaurant, poolside lounge, waterfront dining, fitness center and full-service spa. The comprehensive renovation encompassed all guestrooms, the hotel’s conference center, executive board rooms, common areas and lobbies. Additionally, the hotel features new paint, flooring, lighting, finishes, wall treatments, technology and furniture. JLL’s Project and Development Services group managed the renovation on behalf of Pebblebrook Hotel Trust, the property owner.
LAKE FOREST, CALIF. — Foothill Ranch LLC has completed the disposition of a portion of Foothill Ranch Towne Center, a 1 million-square-foot, master-planned regional retail center in Lake Forest. A private family trust acquired a 121,883-square-foot portion of the retail center, located at 36532 Towne Center Drive, for $22.2 million. Pete Bethea, Rob Ippolito and Glenn Rudy of Newmark Knight Frank represented the seller in the transaction. At the time of sale, five tenants fully occupied the sold portion: At Home, PetSmart, Chipotle Mexican Grill, Red Robin Gourmet Burgers and Brews and a nail salon. Walmart and Target anchor the overall retail center.