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Monday, Jan 30, 2023
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Sales of Apartment Complexes Slow for Third Year in a Row

Apartment sales slowed for the third consecutive year in 2007 in San Diego County as the market continued to correct, according to Cushman & Wakefield.

The commercial broker reported the correction follows the record-breaking years from 2001 through 2004 in a recent report.

“The market is correcting following several years of record demand for units including those for conversion to condos,” said George Carlson, associate director and apartment specialist with Cushman & Wakefield. “Prices skyrocketed and cap rates declined.

“While condo conversion activity has slowed significantly, prices are still viewed as too high by some investors, particularly by smaller, local buyers.”

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According to the report released Jan. 25, sales were down 30.75 percent in 2007 from 2006. There were 482 transactions last year compared to 696 in 2006.

The number in 2007 was the lowest since 1993, according to Cushman & Wakefield, however, the number of units sold was down just 2.14 percent.

Sales in the fourth quarter included the 332-unit Regents La Jolla for $106.4 million, or $320,482 per unit, the 456-unit Waterleaf Apartments in Vista for $69 million, or $151,318 per unit, and the 193-unit Township at Old Poway for $33.7 million, or $174,611 per unit.

Cushman & Wakefield noted that 32 percent of the county’s total units sold were in North County Inland, consisting of 68 transactions, or 3,446 units. Golden Hill had 42 sales involving 206 units and Chula Vista had 24 transactions, or 1,424 units.

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New Investment Group Formed:

Four regional professionals have launched a commercial property investment business in San Diego. The principals at KBR Group LLC said they are backed by the credibility of their individual companies consisting of San Diego-based Capital Real Estate Investments Inc. and USA Properties and Orange County-based SBL Professional Realty.

KBR Group will seek opportunities with holding periods of no more than two years from acquisition to disposition.

The properties will feature tenants with long-term leases and no financing in place, according to KBR Group, but will consider distressed and rehab projects.

“Our ultimate goal is to leverage and capitalize fast-paced real estate opportunities not available to the average investor,” he said.

Michel Kucinski, Bernice Lin, Randy Rivera and Shawn Wamstad said they bring 75 years of experience and have closed more than $2 billion worth of transactions.

“Every investment faces risk. We believe and have proven that risk in the real estate industry can be mitigated by early analysis of the physical, financial and competitive aspect of each investment,” said Kucinski, president and chairman of KBR Group, which opened its doors in January.

The leadership team owns properties valued in excess of $750 million.

Rivera, chief operating officer, founded Capital Real Estate Investment in 2003. He has closed more than 500 transactions throughout his career and currently owns more than $100 million in retail properties.

Wamstad, senior vice president and general counsel, has helped negotiate, underwrite and close more than $600 million in transactions. His practice focuses on acquisitions, dispositions, financing and structuring 1031 tax-deferred acquisitions.


Send real estate news to Michelle Mowad at

mmowad@sdbj.com

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

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