Sunroad Begins Two San Diego Apartment Communities
- Oct 15, 2012
San Diego—Sunroad Enterprises has broken ground on two new apartment buildings in San Diego, the Sunroad Centrum Apartment Buildings at Lightwave Avenue and Spectrum Center Boulevard. All together the two complexes will include 253 units and include fitness centers and subterranean parking garages.
Developer Sunroad is unusual as a real estate company. Founded in 1977 in San Diego, it consists of two divisions: automotive and real estate. The auto division, established in 1984, has grown to include 11 dealerships in San Diego and Mexico, selling in excess of 12,000 new and used vehicles annually.
The company’s real estate division has completed more than 2 million square feet of retail, office, and residential space. Sunroad has also developed and manages Sunroad Resort Marina, a 600-slip resort marina, and Maderas Golf Club.
Sunroad tasked Kitchell to construct both properties. In recent years, Kitchell has built student housing in Arizona and New Mexico, and upscale apartment properties in metro Phoenix, but is no stranger to the San Diego market. Other area projects by the company include UC San Diego Jacobs Medical Center and the recently completed Sharp Chula Vista Medical Center.
“San Diego is among the top three apartment markets in California,” Bill Cornelius, Kitchell’s regional director – community living, tells MHN. “Ariva is in a very desirable location and the demand for Class-A properties in this area is high. This project has been in pre-development for a couple of years, and as we’ve seen with many of Kitchell’s multifamily projects in Arizona, the commencement of development/construction right now strikes a good balance between access to cheap capital, cost of construction and rents.”
San Diego apartment market is one of the tightest major markets in the country, with a vacancy rate of 2.9 percent in the second quarter of 2012, according to Reis Inc. The 2Q12 vacancy rate was unchanged from the prior quarter, but down 80 basis points since the same quarter in 2011. Rents posted solid gains in the second quarter of 2012, Reis reports, with average asking rent increasing by 1 percent and the average effective rent increasing 1.2 percent. The year-over-year gains are 2.5 percent and 3.3 percent, respectively.