Virtú Investments Tees Up Acquisition in San Diego’s Ballpark District

Virtú Investments has acquired ALX, a 313-unit multifamily property in San Diego.

The buyer sees San Diego as an ideal location for investment based on the city’s limited housing supply and property valuations that have fallen to a low point from their 2021 peak.

“For residents, we are seeing growing demand for centrally located, high-quality apartments as the downtown area continues to evolve as a 24-hour destination,” Michael Green, CEO & founding partner of Virtú Investments, told Multi-Housing News. “This demand is only increasing as the city continues to see strong job growth driven by the life science and biotechnology sectors.

The acquisition of ALX further strengthens Virtú’s position in Southern California. The San Diego market is expected to see strong rent growth over the next decade, driven by both growing demand and supply constraints, as rising construction costs greatly reduce the economic viability of new multifamily developments.

“The acquisition comes during a once-in-a-cycle opportunity,” said Green. “Assets are valued far below their recent peaks and institutional buyers are absent.  Furthermore, rising development costs will limit new capacity being introduced to the market, keeping the supply/demand dynamic favorable for mid-to-long term ownership of well-positioned assets.”

High-income growth, steady population gains

Average incomes in the area have seen considerable growth since 2008, while population numbers are also on the rise. ALX, located at 300 14th St., has seen a positive average monthly rent change of 1.7 percent, with an average rent of $3,275.

Located in the heart of San Diego’s Ballpark District neighborhood, ALX provides residents with easy, walkable access to many neighborhoods. The luxury high-rise offers a range of amenities including a rooftop saltwater zero-edge pool and spa, a state-of-the-art fitness center and a game room.

Virtú acquired ALX primarily through the Virtú Evergreen Fund, an open-end fund launched in 2015 for generational ownership, long-term compounding, extreme tax efficiency, and flexible liquidity. The Fund, which recently announced its reopening to new commitments, is designed to take advantage of 1031 Exchanges within the Fund to perpetually defer taxes on gains and cashflow.

The Evergreen Fund is a key strategy within the Virtú platform, which has owned and operated 23,000 apartments across 33 markets and realized a Net IRR of 19.4 percent over 26 years.

Jack McKee, vice president of origination, PearlX, said the downtown San Diego apartment investment market demonstrates remarkable resilience and appeal. “The recent $167 million sale of Millennium PQ to GID and Virtú Investments’ acquisition of the 313-unit ALX property exemplify the robust investor appetite we’re seeing,” McKee noted. “These high-profile transactions underscore the enduring confidence in San Diego’s multifamily fundamentals, particularly in prime locations. While valuations have moderated from their 2021 peak, this adjustment has created an attractive entry point for institutional investors.”

The combination of limited supply, growing demand driven by tech and life science sectors and long-term rent growth projections positions Downtown San Diego as a top-tier market for multifamily investments.

“As construction costs continue to rise, constraining new development, we expect the value proposition of existing high-quality assets in the downtown area to strengthen even further,” said McKee.

A joint venture of Goldman Sachs and Virtú Investments recently purchased Skyglass Tower, a new Class A luxury multifamily tower in Seattle.