One hundred and eleven communities changed hands during that three-month period, up from 87 the year before. But it wasn't enough to turn the overall trend around. The 342 apartment properties that were sold during the first nine months of the year was down 8.6% from the same timeframe in 2007.
And while the number of sales increased during the quarter, the total number of units that changed hands declined, on both a quarterly and annual basis. The figure declined 19.3% between the third quarter of 2008 and a year prior, from 2,291 to 1,849 units. The total for the year, meanwhile, plummeted by 34.2%, from 8,119 units to 5,346.
The shift this year, notes George Carlson, associate director with the San Diego office of Cushman & Wakefield, has been away from major sales of institutional-grade property, many of which have 100 or more units. Some 53% of the residences sold in 2007-- 4,281 units--were the result of 21 sales. Comparatively, eight sales accounted for just 24% of properties traded in the first nine months of last year--1,293 units in communities with 100 units or more.
Whereas institutional investors accounted for most of the significant transactions that took place in 2007, Carlson says it seems like they are now waiting on the sidelines for prices to correct. Concern over the economic recession and the tight capital market are also playing a role in keeping activity levels down. "We are in the third year of a market correction that will likely continue for the coming year," says the executive.
The three most significant sales of the quarter were the $71-million--$236,667 per unit-- trade of the Cardiff by the Sea Apartments, a 300-unit complex at 2170 Carol View Dr. in Cardiff; the Loma Portal Bluffs in the Point Loma area of San Diego, a 113-unit project that was sold for $18.5 million--$163,717 per unit; and the $13.7-million--$122,321 per unit--sale of Arbor Village, a 112-unit community at 4914-4998 Logan Ave. in San Diego.
Broken down by submarket, the Inland North region of the county had the highest number of deals, 15 sales involving 329 units, followed by El Cajon, with 317 units trading in 12 sales. Pacific Beach also saw a dozen deals, but they involved just 56 units, while the Golden Gill-Southeast San Diego area had 11 sales of 15 units.
Through the year, the most active regions, in order, were Inland North--44 deals, 869 units; Golden Hill-Southeast San Diego--38 sales, 636 units; North Park--37 transactions, 363 units; and El Cajon--30 deals, 695 units.
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