Sale of Large Apartment Complexes Stabilizing

SAN DIEGO-Although San Diego’s multifamily sector is still experiencing healthy investment activity, recent research on the region shows that the sale of large apartment properties here has begun to cool somewhat.

The research, compiled by Burnham Real Estate Services, points out that while the volume of first quarter 2003 apartment sales in San Diego increased 7.7% from the same period in 2002, the number of units sold dropped by 33.9% due to a decline in the number of transactions involving 100 units or more. “The drop in the number of units sold during the first three months of the year is due to the fact that there was just one major sale of a project with 100 or more units, compared to eight such sales totaling 1,381 units during the first quarter of 2002,” says George Carlson, senior vice president and apartment specialist with Burnham Real Estate Services. “We have essentially entered a period of calm following last year’s record activity in which 21 transactions involving 100-unit-plus projects occurred,” he adds.

Although less large apartment complexes are changing hands in the region, investment demand for San Diego multifamily product is still strong, as evidenced by Burnham’s statistics. According to the Burnham report, there were 265 apartment sales involving 2,878 units during the first quarter of 2003, compared with 246 sales involving 4,352 units during the same period in 2002.

The Coastal North area led the pack when it came to the number of apartment transactions that closed in this year’s first quarter. Burnham’s researchers say that 28 multifamily properties involving a total of 304 units traded hands in the Coastal North region during the first three months of 2003.