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Tuesday, Jul 16, 2024
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Apartment Market Sales Slow, But Rent Increases Predicted in ’07, ’08

Following two years of record sales, prices in the San Diego apartment market continue to slow down, according to Hendricks & Partners, a Phoenix research firm focused on the multifamily industry.

The firm recently released its apartment industry analysis for the past year and its forecast through 2008.

It found that the San Diego market experienced healthy growth in 2006.

New construction brought 1,434 new units on-line in the fourth quarter while average vacancy rate was at 5.3 percent during the same time period, up slightly from 4.9 percent the previous year.

The firm also found that a gradual downward trend of vacancy rates will continue and rental rates will increase 2.5 percent in 2007 and 4.1 percent in 2008.

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Foreclosures Not Flying Below Radar:

The number of foreclosed homes in California sold at auction has increased significantly in the past six months.

More than 5,300 California homes in foreclosure were sold in March, according to Foreclosure Radar, a foreclosure listings and software company based in Discovery Bay.

The sales last month represented a 27 percent increase from February, and a 264 percent increase from six months earlier.

San Diego County had one foreclosure for every 5,668 residents in March, said Foreclosure Radar.

Sean O’Toole, chief executive officer, said foreclosed homes account for 15 percent of all home sales in the state.

“This isn’t just a story about failing subprime lenders and their customers,” he said. “At the current pace, foreclosures will be a significant part of the real estate economy, a fact which bears close scrutiny even in areas not yet affected.”

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Multimillion-Dollar Leases:

The U.S. General Services Administration has signed a five-year lease valued at $9 million for 34,000 square feet of space at the Torrey Pines Court office park in La Jolla that will serve as a home for the Southwest Fisheries Science Center.

The GSA serves as a centralized procurement and property management agency for the federal government.

The science center is the research arm of the National Oceanic & Atmospheric Administration’s National Marine Fisheries Service.

Science center scientists conduct marine biological, economic and oceanographic research, observations and monitoring.

GSA also signed a 10-year lease worth $6 million for 12,000 square feet of office space on Ash Street downtown to be used by the Department of Homeland Security.

Homeland Security plans to move into the new location in June.

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Prime Real Estate:

Two buildings on Paseo Delicias in Rancho Santa Fe recently sold for $10 million.

The two buildings, totaling 8,000 square feet plus 41,000 square feet of land, sold to Security Asset Credit for the development of a residential and retail center, which will be called The Lilian at Rancho Santa Fe.

The Lilian, named for its architect, Lilian Rice, will feature 11 homes and ground floor retail space.

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Out Of This World Deal:

Golf Galaxy, a retailer featuring accessories, apparel, equipment and services, signed a 10-year lease at Carmel Mountain Gateway Plaza on Carmel Mountain Road and opened last month.

The $4.8 million lease covers 16,600 square feet of retail space.

The store is the first for the chain in California, which counts 65 stores in 24 states.

The retailer also offers Professional Golfers’ Association of America instruction, club trade-in and pre-owned club programs, free custom club fittings, club repair and golf simulator rental.

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A Growing Concern:

Synthetic Genomics Inc., a biotechnology company founded here, signed a 67-month lease valued at $3.1 million for 22,000 square feet of laboratory space on North Torrey Pines Road. The lease expands the company’s current space in the building by 8,000 square feet.

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On The Move:

San Diego County’s Department of Purchasing and Contracting signed an 84-month lease valued at $3.5 million for 15,000 square feet of office space in the Willow Creek Corporate Center in Scripps Ranch.

The department is relocating from Kearny Mesa to the larger office space in May.

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Signs Point To Ruffin Road:

The Hospital Association of San Diego and Imperial Counties signed a lease valued at $950,000 for 3,900 square feet of office space in the Four Points Business Park on Ruffin Road.

The association, which represents 35 hospitals and other health care facilities, is relocating this month.

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Investing Locally:

Newport Beach-based Roth Capital Partners LLC has leased 2,500 square feet of office space at Paseo del Mar on El Camino Real from Newport Beach-based KBS Realty Advisors.

Owners leased the property for 48 months at $469,000, and the space will be used for investment banking services.

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Managing Its Office Space:

Heritage Wealth Management LLC has subleased 3,300 square feet of office space at Kilroy Sabre Springs office park on Evening Creek Road from Horsham, Pa.-based GMAC Mortgage LLC. The property leased for 18.5 months at $181,000 and will be used for a financial company.

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Keeping It Local:

The Family Literacy Foundation has leased 2,800 square feet of office space at Sorrento Business Complex on Sorrento Valley Road. The property leased for 36 months at $143,000 and will be used for the nonprofit organization. The San Diego-based organization was formerly located in Solana Beach.

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Senior Living:

The Hillcrest Regency apartment complex on Essex Road sold for $6.1 million. Hillcrest Regency is a 47-unit, senior-living complex built in 1988.


Send real estate news to Michelle Mowad at

mmowad@sdbj.com

. She may also be reached by phone at (858) 277-6359, ext. 3109.

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