San Diego Business Journal

Downtown Developers Put Multifamily First

PROPERTY: Six Apartment Projects Under Construction By Lou Hirsh Monday, July 1, 2013
Developer MB Property Acquisitions has proposed a 279-apartment, 22-story mixed-use development in East Village, called Pacific Heights, which would also include retail elements and four levels of underground parking.

Developer MB Property Acquisitions has proposed a 279-apartment, 22-story mixed-use development in East Village, called Pacific Heights, which would also include retail elements and four levels of underground parking.

“We have a lot of people on our interest list for Broadstone Little Italy,” Yanicelli said, noting the project is drawing interest from young, upwardly mobile professionals looking to rent in urban areas near job hubs including downtown and Kearny Mesa.

A similar contingent will likely be the tenants at two other local Alliance apartment projects where construction recently began. Openings are set for late 2014 at Alliance’s 100-unit community at Fifth Avenue and Thorn Street in Banker’s Hill, and a 360-unit project underway off Aero Drive in Kearny Mesa.

Kearny Mesa Market

“Kearny Mesa especially has a lot of workers employed in health care, with hospitals there like Sharp and Rady,” Yanicelli said. He said that the company is also looking to serve a large contingent of workers employed at several distribution centers, government contractors and medical supply firms in Kearny Mesa.

Earlier this year, San Diego County placed sixth in brokerage firm Marcus & Millichap’s 2013 annual ranking of the nation’s strongest apartment markets, based on factors including supply and demand, construction trends, job creation and the overall health of the local economy.

The local region held its national ranking from 2012 in the report, intended to serve as a guide to multifamily investors. San Diego was among five California metro markets placing in the top 10 this year, joined by San Jose (No. 2 after New York City), San Francisco (No. 3), Orange County (No. 4) and Los Angeles (No. 10).

Marcus & Millichap is forecasting that new apartments coming on the market will raise San Diego County’s apartment vacancy rate slightly this year, to 3.1 percent, with asking rents rising 4.2 percent. The local apartment supply is expected to rise 2.1 percent in 2013 as 3,800 apartments come online, more than tripling last year’s 1,090 units.

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