Harborview Apartments in San Diego County Sells for $22M

National City, Calif.—Harborview, a mixed-use property with 81 apartment units and 2,800 square feet of retail space, has traded hands. Located at 819 D Ave. in National City, Calif., it sold for $22 million.

Dixie Hall, Kevin Mulhern, and Rachel Parsons of the CBRE Multifamily team represented the buyer, Harborview Partners LLC, with Carolyn Kutzke as managing member. The seller, 819 D Avenue LLC, which is affiliated and managed by Birge & Held Asset Management LLC, represented itself.

The community was originally built in 2005 as a 75-unit condo development with 18,000 square feet of retail space. The seller purchased the partially-completed project from the lender in 2009 during the pit of the recession.

In addition to completing the construction and interior finishes, the post-recession owner also converted the majority of the ground floor retail into six additional two-bedroom loft-style units. Although originally intended to be condos, Harborview has been operated as a rental property since its completion.

The buyer obtained a seven-year, fixed-rate, $15 million loan from San Diego County Credit Union. It used exchange proceeds from the sale of 22 units located at 3060 Suncrest and 38 units located at 4823 68th St., for the equity needed for the acquisition.

National City is in San Diego County. Greater San Diego is one of the most robust apartment markets in the country, as demand easily outpaced completions in the third quarter of 2015, MPF Research reported. In 3Q, occupancy increased 0.3 percentage points quarter-over-quarter, to 97.1 percent.

With such tight occupancy, owners remained confident in their pricing strategies. Effective rents increased 3.7 percent quarter-over-quarter in 3Q 2015, the largest quarterly gain in 15 years. That quarterly hike contributed notably to annual rent growth, which came in at a 14-year high of 8.4 percent, according to MPF.