JV Begins Work on San Diego Apartments
- Oct 11, 2013
San Diego—A joint venture between Behringer Harvard Multifamily REIT I Inc and KNR Mission Gorge LLC has started construction on Mission Gorge, which is the tentative name for a multifamily property in the East Mission Valley submarket of San Diego. When complete in early 2016, the community will total 444 units.
According to the developers, about half of the units will be one-bedroom, one-bath apartments, but units with two or three bedrooms and two baths will also be available. Unit sizes will range from 713 to 1,363 square feet. Amenities will include resort-style pools and spas, 24-hour sports club, business center, game lounge and outdoor media lounge with fireplace and flat-screen television.
Greater San Diego has a fairly tight apartment market, though more-or-less at equilibrium. According to investment specialist Marcus & Millichap, vacancy has settled into a small range as absorption is roughly in line with development. By year-end 2013, vacancy will average 3.8 percent, an annual rise of 30 basis points. In 2012, vacancy also inched up 30 basis points.
Job creation in the San Diego area, though tempered somewhat by the sequestration, is nevertheless expected to be healthy enough in coming years to support demand for multifamily units. Employment will expand by 28,000 positions in 2013, a 2.2 percent increase. In 2012, 29,500 positions were created in the metro market.
Behringer Harvard Multifamily REIT’s portfolio currently includes investments in 56 multifamily properties in 13 states comprising more than 16,000 units. The Mission Gorge project is its first in the San Diego market. KNR Mission Gorge is a multifamily development partnership formed by three former Archstone senior executives shortly after the acquisition of Archstone by Equity Residential and AvalonBay early this year.