San Diego-Area Asset Gets $87M in Financing
This loan is facilitating the property's first trade in more than 20 years.
Bridge Investment Group has obtained $87.2 million in acquisition financing for Santa Fe Ranch Apartments, a 320-unit garden-style multifamily property in the La Costa neighborhood of Carlsbad, Calif. The investor inked a deal to buy the greater San Diego area property in April from Nuveen Real Estate for $138.7 million.
Walker & Dunlop Capital Markets, led by Mark Grace and John Montakab, arranged the interest-only, fixed-rate loan on behalf of the buyer, with Freddie Mac providing the capital. This is the first time the property has traded hands in over 20 years. Nuveen acquired the asset in 2002 from Northwestern Mutual Real Estate for $45 million.
Developed in 1987, Santa Fe Ranch consists of 19 buildings on 20 acres in a relatively supply-constrained area. The property offers a mix of one- and two bedroom units. All units include a washer/dryer, microwave oven and fireplaces.
Common-area amenities include a resort-style pool and spa, fitness center, business lounge, barbecue/picnic areas and a dog park. Residents also have access to on-site tennis/pickleball courts, a basketball court and 700 parking spaces.
The property is currently 96.9 percent occupied, according to Yardi Matrix data. The average rent at Santa Fe Ranch is $2,687 a month, up from $2,546 in 2021.
San Diego multifamily market cools
Santa Fe Ranch’s rents are only a little below the greater San Diego average, which comes in at $2,744 at the end of 2024, according to the latest Yardi Matrix San Diego multifamily market report. They’re down 0.1 percent over the quarter, but up 0.5 percent year-over-year.
The property also roughly mirrors occupancy trends in the San Diego market. Average advertised overall occupancy in stabilized assets was down 20 basis points year-over-year, to 96.1 percent, as of November.
Developers completed 4,610 units in the market last year, about 500 units less than the 2023 total and about 600 units more than the annual average since 2017, Yardi Matrix reports. The current pipeline includes 10,457 units under construction in December, as well as 45,000 units in the planning and permitting stages.
Investors are still interested in the market, Yardi Matrix notes, but not as much as before the pandemic. Investors ponied up $1.1 billion in 2024 in 17 single-asset multifamily transactions, which was $150 million more than 2023. But the 2024 total still lagged behind the 2015 to 2019 average at $1.5 billion.
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Besides the Santa Fe Ranch deal, other recent multifamily asset sales in metro San Diego include Mesirow Financial’s $185 million acquisition of Preserve at Melrose, a 410-unit property in the Oceanside submarket. Earlier this month, The Hanover Co. closed on a $110 million refinancing loan for Stanza Little Italy, a 270-unit community located in downtown San Diego.
