San Diego Apartments Snag $38M Refi

KeyBank Real Estate Capital has provided a $37.8 million Fannie Mae first mortgage for Stonewood Garden Apartment Homes, a property in San Diego. The loan was used to refinancing existing debt.

Robert Prouty of Key’s Commercial Mortgage Group arranged the nonrecourse financing, which has a 12-year term, seven-year interest only period and a 30-year amortization schedule.

The 255-unit property was built in 1979, with renovations planned for later this year. Fifty-one of its units are designated for residents earning at or below 80 percent of area median income, an important consideration, since the market-rate units at the property start at about $1,600 a month for one bedroom, and reach over $3,100 for three bedrooms.

Stonewood Garden offers one-, two- and three-bedroom units. Common amenities include courtyards, two swimming pools, spa, business center, fitness center and resident clubhouse. The property also has laundry facilities, though there are washers and driers in some units.

San Diego is a tight apartment market. According to Marcus & Millichap, that’s because of barriers to entry into single-family housing and the formation of new households that will generate substantial rental demand in 2017. Expanding bar, restaurant and hotel employment, plus gains in retail staffing, are filling the pipeline of prospective Class B and Class C apartment residents, and putting average vacancies in the mid-3 percent range.