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Apartment Sector Hits High Marks

SAN DIEGO-Demand for condo conversions and low housing affordability strengthen multifamily investments. San Diego County receives highest marks in nearly 20 years.

By Daniel D. Williams | Updated on April 10, 2005

SAN DIEGO-With all the numbers in, 2004 turned out to be a banner year for San Diego County’s apartment market, according to a report released by Burnham Real Estate. The numbers show the county hit a 19-year high for apartments sold and a 15-year record for the sales volume.”Strong apartment sales activity is being driven by increased demand for condo conversions as well as by strong consumer fundamentals in the local rental market,” says George Carlson, vice president and apartment specialist with Burnham Real Estate. In all, more than 24,000 units sold during 2004, the highest number since 1985 when more than 28,000 units changed hands. For the year, there were also 1,339 separate apartment deals, the largest such number since 1,426 transactions in 1989. Those numbers remained strong, although sales dipped 2.7% during the fourth quarter versus the previous year, with 290 sales last year compared to 298 in 2003. However, the number of units sold rose 16.5% to 5,802 units, due to the larger volume deals taking place.Three deals in particular stood out during the quarter and all were located within the University Towne Centre area: Nobel Court, a 685-unit complex that sold for $149 million; La Cima, a 514-unit community that sold for $131.2 million; and the Venetian, a 368-unit project that sold for $96 million. According to Carlson, most of the fourth quarter sales have already been mapped for condos.”Despite the current unprecedented high pricing, we are seeing continued strong institutional interest along with first-time small investors who see tremendous potential for large and small properties either for conversion or for long-term growth and rental income,” Carlson says.

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