Apt. Fetches $34M, Readies For Condo Conversion

SAN DIEGO-The craze for condo conversions has lost little, if any, steam in San Diego County with another property trading hands. The latest to sell is Avalon at Peñasquitos Hills, a 176-unit community located at 13293 Rancho Peñasquitos Blvd., near the newly completed SR-56. In the deal, Alexandria, VA-based AvalonBay Communities Inc. sold the property to locally-based Pacifica Companies Inc., one of the area’s more active condo converters, for $34.2 million. Pacifica will rename the property Cantabria, and, after a light rehab, will offer units for sale this summer. Unit prices were not available, but the conversion is being driven by the strong demand for condos, according to J. Kevin Mulhern of CB Richard Ellis’ San Diego central office. Mulhern, along with Dixie Hall and Dick Schneider, all of CB’s San Diego office represented both the seller and the buyer in the transaction with assistance from Ray Eldridge and Chris Knowles of CB Richard Ellis’ Newport Beach office. Mulhern tells Globes.com the condo map was already in place when AvalonBay acquired the property in the late 90s and, with the recent run up on conversion property, the public company saw a good opportunity to sell to a converter. According to Mulhern, AvalonBay had recently painted the exterior and complete other rehabs to the site, before selling. He expects Pacifica to make a few interior upgrades including “replacing the cabinetry, putting in granite countertops and possibly new doors,” before making units available for sale this summer.Among the properties amenities are a clubhouse/fitness center, a business center, a maintenance shop and a laundry facility. The property also features a swimming pool, spa, two tennis courts, a racquetball court, barbecue/picnic areas, a sand volleyball court, a playground, a tetherball court and 150 carports. As for the unit mix, the property includes 48-1 bedroom/1 baths of 650 sf; 48-two bedroom/one baths of 810 sf; and 80-two bedroom/two baths of 890 sf. Mulhern says his marketing team, along with the entire multifamily sector in San Diego experienced record sales levels last year. The CB team pushed $650 million in multifamily property, with more than 65% of those units earmarked for condo conversion. Historically, the group had brokered around $200 million. In all, the county saw $2.4 billion in multifamily deals, up from the average of $800 million. “This year remains above the norms,” says Mulhern, “but I have a hard time envisioning it going on forever. Eventually, we’re going to run out of properties to trade.”