Top 10 Multifamily Transactions in San Diego

Despite an overall decline in transaction volume across the market, Yardi Matrix data shows several deals upwards of $100 million closed in the past 12 months.

Investors remain active in the San Diego multifamily market, despite an overall declining sales volume following the cycle high in 2016. In 2018, roughly $1.1 billion in deals closed across the metro, according to Yardi Matrix. Average cap rates for stabilized properties in the area are now among the lowest in the U.S.—between 4 and 4.5%, per data from CBRE’s North America Cap Rate Survey.

However, investor appetite has not necessarily diminished as much as it has shifted. Nearly half of the top 10 transactions from the past year were value-add acquisitions, and only three of the communities were within San Diego city limits. The following list highlights the largest multifamily transactions from the past 12 months ending in February, with data provided by Yardi Matrix.

5. Sofi Shadowridge

Sofi Shadowridge (Image via Google Street View)

Pacific Urban Residential purchased Sofi Shadowridge, a 314-unit luxury community in San Diego’s Vista submarket, for $115 million in June. The seller, Invesco Real Estate, had acquired the asset in December 2011 for $80.4 million from Archon Group. Newmark Knight Frank provided $48.3 million in Fannie Mae financing to the buyer. The fixed-interest mortgage matures in 2033.

The community, located at 1850 Thibodo Road, is a stone’s throw from a wide range of retailers and the entrance to California Route 78. Sofi Shadowridge contains one-, two- and three-bedroom apartments, with floorplans between 669 and 1,432 square feet. The property’s amenity mix includes a business center, a movie theater, a game room and a recycling center. In February, the asset was 94.3 percent occupied.

4. Domain San Diego

Domain San Diego (Image courtesy of Yardi Matrix)

Essex Property Trust sold Domain San Diego, a 379-unit multifamily asset in the city’s Kearny Mesa submarket, to Magnolia Capital for $132 million, also in June. CBRE Capital Markets originated $78.7 million in 10-year CMBS acquisition financing. The community’s two buildings last changed hands in late 2013, when developer Wood Partners sold the newly completed asset for $121 million.

Located at 8798 Spectrum Center Blvd., the property is situated near both the Cabrillo and Escondido freeways, 9 miles north of downtown San Diego. Domain offers studio apartments, as well as one- and two-bedroom units, with floorplans up to 1,309 square feet. The pet-friendly community’s amenities include a swimming pool, a barbecue area, a fitness center and approximately 750 parking spaces.

2. Regents La Jolla

Regents La Jolla (Image via Google Street View)

In February, Raintree Partners paid LaSalle Investment Management $141.5 million for Regents La Jolla, a high-end, 333-unit community in the metro’s University submarket. Pacific Life Insurance Co. provided $87.5 million in acquisition financing to the buyer. The seller took ownership of the asset in 2007 in a $106.5 million deal with Montecito Property Co. In addition to the 333 rental units, the property contains 241 individually owned condominium units, which were not included in the transaction.

Located just east of the University of California San Diego’s campus, the property is close to a wide variety of shopping, dining and hospitality properties. More than 3 million square feet of office space is within a half a mile of the community.

2. MARC San Marcos

MARC San Marcos (Image courtesy of Yardi Matrix)

Tied as the second largest transaction over the past 12 months, MG Properties Group’s $141.5 million acquisition of the newly completed, 416-unit MARC San Marcos closed in October. CBRE Capital Markets originated $83.1 million in financing through Freddie Mac to finance the deal. The seller, a joint venture between Intracorp and Resmark Equity Partners, finished work on the property in February 2018, following more than two years of construction work.

Located at 1045 Armorlite Drive in San Marcos, the community contains a mix of studio, one-, two- and three-bedroom apartments, as well as 64 two-bedroom townhome units. Floorplans range from 650 to 1,250 square feet. Amenities include two swimming pools, a conference center, a pet spa and complimentary Wi-Fi throughout all common areas. Additionally, more than 15,000 square feet of retail space is at the ground floor of the building.

1. Alterra & Pravada

Alterra & Pravada (Image courtesy of Yardi Matrix)

The metro’s largest multifamily deal in the last year took place in the La Mesa submarket in August. TruAmerica Multifamily, in partnership with Intercontinental Real Estate, paid $149.5 million for two adjacent Class B communities from Fairfield Residential. Following the sale, the assets were merged into one 527-unit property, rebranded as Alterra & Pravada.

The community is located at 8727 Fletcher Parkway, near the Sharp Grossmont Hospital and the nearly 1 million-square-foot Grossmont Center. Downtown San Diego is less than 15 miles away, accessible via Interstate 8. Apartments range from one- to two-bedroom floorplans, each containing between 616 and 1,275 square feet. As of February, the property was 97.2 percent occupied.