January 9, 2015

MF Fundamentals Better Than Ever

Going into 2015, TruAmerica Multifamily senior managing director Greg Campbell makes the case that SD has some of the best multifamily fundamentals in the country. He says it's a good market to buy into, if you can find the right deal. Supply is the issue: There just isn't much.

Greg says the local economy is robust, which continues to foster demand. More than that, nearly half of the population is renters, compared to the national average of 35% among major metros. And his assessment of the market's not idle speculation: to begin the year, TruAmerica and JV partner Investcorp picked up the 456-unit Waterleaf Apartments in Vista, acquiring it from RedHill Realty Investors and AEW Capital Management for $86M in an off-market deal. (Last month, Greg told us that OC's multifamily fundamentals rock, too.)

Greg says the previous owners took good care of the 30-year-old property, but the Waterleaf's really a value-add opportunity. TruAmerica plans to make a few million in capital improvements, including common area upgrades and the completion of interior renovations started by RedHill. The property was 97% leased at closing. Cushman & Wakefield's San Diego Multifamily Advisory Group's John Chu and Ed Rosen repped both sides.

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Retailers Hungry for SD Locations

The strong local economy also is supporting retailer interest, Heritage Group senior director Kyle Clark tells us. He says the current recovery has taken much longer than past cycles, creating an understandable caution, but consumer confidence has been on the rise. Recently Kyle repped the owners of Santee Town Center in a 1,750 SF lease by Club Pilates, which is the health club's third location in the area.

Kyle expects the positive fundamentals to continue. There's more disposable income available (partially stemming from lower gas prices), and that will stimulate more spending, he says. Also, retail vacancies are down, and that will create a sense of urgency among tenants looking for quality space. Club Pilates was repped by Pacific Coast Commercial's Bo Gibbons.

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Industrial Revved Up
for Good Year

One more property type that's benefiting is industrial. Lee & Associates VP Chris Roth (snapped in his office) tells Bisnow that North County San Diego industrial has seen a consistent decline in vacancies for the past few years. In addition, he says the investment market has been strong due to the low interest rates, which bumps up prices. Lee principal Rusty Williams tells us the lack of spec construction lately will continue to push prices and that lease rates will also increase due to the lack of options to buy.

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Campus Marketplace Bags $41M in Financing

NorthMarq Capital SVP James DuMars, in the Phoenix office, arranged $41M in financing for a borrower to acquire the Campus Marketplace shopping center at 300-380 S Twin Oaks Valley Rd in San Marcos, CoStar reports. Built in 2000 on 15 acres, the 144k SF neighborhood center is anchored by a Ralph's (pictured), CVS and Discovery Isle Child Development Center. The borrower acquired the property just before year-end from Inland American Real Estate Trust.

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