Also—and this goes for the whole state of California—the entitlement process is slow. California is not the most development-friendly environment in the country. In any other place in the country, it's easy to build, but here, entitlement can take up to five years. Between environmental regulation, NIMBYism and local homeowners protesting development, the list runs the gamut. It's a difficult environment in which to get stuff done.

The one exception is the Downtown area of San Diego, which is a little more straightforward. To develop in Downtown, there are big differences: 1. You don't need an EIR because there's a master EIR in place for all of Downtown, which takes up to 24 months off the entitlement cycle. 2. All development Downtown is controlled by Civic San Diego, so everyone Downtown has development by right, and the zoning is flexible. It's not your typical entitlement process, but more of a design review, and you can get approved in nine to 12 months. For that reason and because urban development in general has been much more favored everywhere in the country for the last four to five years, a large part of multifamily development has taken place Downtown in this county. People who complain about lack of housing and affordability throw road blocks in that make it hard to build.

GlobeSt.com: Why is San Diego an attractive market to investors as compared to Orange County, L.A. and other Southern California markets?

Mulhern: There are a lot more similarities between San Diego, Orange County and L.A. than dissimilarities. Most of our investor clients and equity capital in the market view Southern California as one regional market. There are differences in the market, but lots of similarities as well. The coastal environment, weather, lifestyle and diversified local economy in San Diego—the backbone has been military and defense-related industries—that's not going anywhere. But back in the day, 20 to 30 years ago, that dominated our employment. Now, there are a lot of biotech companies in Torrey Pines, in Sorrento Mesa, there's Qualcomm, and our market is much more diversified. San Diego also has a very highly educated workforce—we're in the top five in the country in terms of the number of post-high-school graduates. We have a young workforce—this is also true up and down the West Coast, in Portland, Seattle and the Silicon Valley: there's a new-age employment driver.

The difference between San Diego and Seattle is that Seattle has three or four mega-employers, including Microsoft and Boeing; San Diego only has two Fortune 500 companies: Sempra and Qualcomm; we are dominated by small to mid-growth companies. There are lots of startups and young companies in expansion mode here, though, so you don't know which is the next Qualcomm.

GlobeSt.com: What are the most active submarkets in San Diego for multifamily?

Mulhern: Downtown is certainly the most active, but there's a lot of activity in Mission Valley and some in UTC, the Golden Triangle and South County in the eastern Chula Vista market. It's really spread out. Most of the suburban locations have a project here and there, but no concentrations. We're really severely undersupplied in the suburban markets; most has been built in the urban-infill markets—even Mission Valley and UTC are more urban. So, in the suburban markets, there is very little built. That's part of the issue with why there's so much pressure on rents: housing prices no more affordable either. San Diego is at an all-time high in housing median price.

GlobeSt.com: What else should the readers know about the San Diego market?

Mulhern: It's an evolving market. Probably historically, San Diego hs not been as sophisticated a market in terms of high-rise development as Seattle or parts of west side of L.A., but that's starting to change. We're seeing multiple high-rise for-rent projects hit the market and go into development. Only a handful have been developed over the last few years, but we're seeing more of that type of development. There's a scarcity of land, so you have to go vertical if you can in terms of entitlements to use land properly.