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HUNTINGTON BEACH, CA—One of the few cities in Orange County that is truly categorized as a coastal community, Huntington Beach has a lot to offer multifamily investors, Berkadia's senior directors Shane Shafer and Peter Hauser tell Globest.com. As we recently reported, the two negotiated the sale closed of Artisan Apartments, a 277-unit multifamily property at 15555 Huntington Village Lane here, for $87.5 million. The seller was Kennedy Wilson and the buyer was Domino Realty Management Co. Inc., both based in Beverly Hills. We spoke exclusively with Shafer and Hauser about the multifamily market here and what makes it special.
GlobeSt.com: How would you characterize the multifamily market in Huntington Beach compared to the surrounding areas of Orange County?
Shafer: Huntington Beach is one of the most desirable and highest-demand areas for buyers, and some of the most profitable and best-performing apartment submarkets for owners. Living near the beach is desirable for tenants and provides a high quality of life. Huntington Beach is only one of a few cities in Orange County that is truly categorized as a coastal community. The result is a stability of income, strong rent growth and resiliency in recessionary times.
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GlobeSt.com: What are the drivers behind this submarket's strength?
Shafer:Continued job growth, access to high-wage jobs, very well-educated residents and, being a beach community, a great quality of life.
Hauser: The market has a diverse employment base, but the leaders are in the areas of technology, tourism and outdoor-apparel design and manufacturing. The tourism industry provides more than 5,000 jobs in the city with more than 16 million visitors coming to Huntington Beach each year, spending in excess of $340 million. The average annual income of more than $108,000 is one of the highest in Orange County. Additionally, high home prices allow for a quality renter population since many households cannot afford homeownership, which supports strong demand for rental housing.
GlobeSt.com: Do you anticipate larger multifamily sales in this market in the near future?
Shafer:Yes, it is still a favorable time to take advantage of the low interest-rate environment and the abundance of capital. Rents have continued to increase, making it favorable for owners who want to sell and maximize value. Those owners who decide to sell will take advantage of the strong investment demand for this submarket.
GlobeSt.com: What else should our readers know about the Huntington Beach multifamily market?
Hauser:The recent renovation of the Bella Terra Mall has created a destination venue for shopping, dining and entertainment. The new Pacific City development will add to the city's appeal to both tourists and residents. Pacific City is a new $135-million ocean-front development located near the Huntington Beach pier. Pacific City plans include 516 luxury apartments, 400 hotel rooms and 191,000 square feet of retail and office space. In addition to these developments, a few others include mixed-use residential and retail developments: the Village at Bella Terra, Huntington Beach Lofts, Boardwalk, Elan and Beach & Ocean. These projects will add nearly 2,000 multifamily units and 56,000 square feet of retail and restaurant space.
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
