Equity Residential Reaps $313M for San Diego Sale
This marks the city’s largest multifamily transaction in 2020.
Sam Zell’s Equity Residential has chalked up this year’s largest multifamily sale on record in San Diego, Calif., by offloading a 679-unit apartment tower for about $312.5 million to an unknown buyer. The NYSE-listed apartment REIT sold Vantage Pointe, the 40-story property at 1281 9th Ave., for a price that equates to roughly $460,236 per unit.
The property changed hands at a price that Equity Residential had ascribed to the asset before the pandemic, the company said in a statement. Equity Residential, which currently owns or has investments in nearly 78,000 apartment units across the country, picked up Vantage Pointe for $197.6 million in 2010, according to Yardi Matrix. The seller was Pointe of View Development, which completed the property in 2009.
The latest sale generated a disposition yield of 4.1 percent and a preliminary unlevered internal rate of return of 8.8 percent over the firm’s 10-year ownership period, Equity Residential noted. The REIT used the sale proceeds along with cash on hand and commercial paper borrowings to pay down its $750 million in 4.635 percent unsecured notes which are due next December, which is the firm’s only significant 2021 maturity.
Vantage Pointe’s one- and two-bedroom units are more than 97 percent occupied, according to Yardi Matrix. The property also offers a fitness center, business center, clubhouse, swimming pool and spa, as well as 968 parking spaces. Located in central San Diego, the community is within walking distance of the city’s downtown attractions, with quick access to Interstate 5 and State Route 63.
Other large deals in the southern California city this year have included Prime Residential’s acquisition of Agave Ridge, a townhome community in the Kearny Mesa enclave, for $107 million in October. During the same month, TA Realty acquired Valentina by Alta, a 110-unit community in the Little Italy neighborhood for $78 million.
Equity Residential, which acquires, develops and manages properties across the U.S., in August acquired the 158-unit Notch in Newcastle, Wash., from Goodman Real Estate for $48.9 million. Earlier in the summer, the company sold the 525-unit Willard Towers in Chevy Chase, Md., to Dweck Properties for $276.5 million.