Alliance Residential Buys San Diego-Area Apartments for $160M
- Dec 06, 2013
Coronado, Calif.—Alliance Residential has acquired Coronado Bay Club, a 549-unit, garden-style apartment community in Coronado, Calif., an affluent “island” suburb of San Diego (it’s actually near the tip of a peninsula between the Pacific and San Diego Bay). The buyer paid more than $160 million for the property.
Located on a 13.9-acre site at 1515 Second St., Coronado Bay Club is on the water near the renowned Hotel Del Coronado and Coronado Beach. Besides views of downtown San Diego, San Diego Bay and the Coronado Bay Bridge, the property features an 18,000-square-foot clubhouse, meeting rooms, a business center, on-site beauty salon, fitness center, resort-style pool and spa, and garage parking.
Jones Lang LaSalle brokered the deal on behalf of LaSalle Investment Management. Alliance’s JV partner in the transaction is a large institutional pension fund investor, with MetLife Real Estate Investors serving as lender.
Although job creation in San Diego isn’t as robust as in some other parts of California—the sequestration is having an impact on the local economy—demand for apartments is still fairly brisk because for-sale housing is so expensive. According to investment specialist Marcus & Millichap, local apartment vacancy is a tight 3.1 percent, down from 3.5 percent at the end of 2012. Landlords have been able to raise their effective rents 5.6 percent on average this year.
Including this acquisition, Phoenix-based Alliance’s Southern California region has acquired, commenced construction, completed or contracted for 13 projects with a total capitalization of roughly $1 billion during the current real estate cycle. According Drew Colquitt, Alliance’s managing director for acquisition, development and construction in SoCal, the company is looking to further expand its market share in the region in 2014.