SAN DIEGO-Henry Manoucheri, chairman and CEO of Universe Holdings has sold Cabrillo Springs, a 369-unit urban infill asset in San Diego, for $70.9 million to a Los Angeles-based investment firm. The buyer satisfied its 1031 exchange requirement with this acquisition, a sale that equates to $192,140 per unit and a cap rate of 5.35%
Institutional Property Advisors, a recently formed multifamily brokerage division of Marcus & Millichap serving the needs of institutional and major private investors, arranged the sale. Ron Harris, an executive vice president of investments; Stewart Weston, a senior vice president of investments; Christopher Zorbas, a vice president of investments with Marcus & Millichap; and Joseph Smolen, an associate director, represented the seller. IPA and Marcus & Millichap also represented the buyer.
“This was our second largest sale since 2006, which indicates that the apartment investment sector is making a strong comeback in Southern California,” Manoucheri explains. “In spite of the market challenges in the past few years, Ron Harris and his team have been able to achieve fair values on all of our property dispositions, including Cabrillo Springs."
The team notes that it did receive a variety of offers "from serious, qualified investors."
According to Zorbas, IPA “ultimately produced a double-digit number of offers in an extremely competitive bidding environment within a tight pricing spectrum." He adds that the transaction demonstrates that both out of area and local investors remain focused on well-located, prime apartment assets in San Diego County.”
Located at 7901 Harmarsh St. in the Serra Mesa submarket, the 368,575-square-foot Cabrillo Springs occupies a 12.5-acre lot that could allow the new owner to develop additional apartment units in a future market cycle. Constructed in 1959, 80% of the units have been renovated.
The property includes two-bedroom and three-bedroom, townhouse-style units averaging 999 square feet. Units include upgraded kitchens with full appliance packages, large walk-in closets, nine-foot high ceilings on first floors and 10-foot beamed ceilings on second floors, as well as enclosed patios. Community amenities include five resort-style swimming pools, five wading pools, a 24-hour fitness center, fully furnished sundecks, nine 24-hour, on-site laundry facilities, four on-site playgrounds, a picnic area with barbecue
“With its varied amenities package and attractive unit mix, Cabrillo Springs is already one of the most sought-after multi-unit addresses in the San Diego MSA,” says Harris. “By renovating the property’s exterior and implementing renovations to the existing units, the new owner has can realize significant upside potential in a premier submarket,” he concludes.
Cabrillo Springs is adjacent to the Sharp Medical Park and less than one mile from San Diego Mesa College which features an enrollment of more than 23,000 students.
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Natalie Dolce
Natalie Dolce, editor-in-chief of GlobeSt.com and GlobeSt. Real Estate Forum, is responsible for working with editorial staff, freelancers and senior management to help plan the overarching vision that encompasses GlobeSt.com, including short-term and long-term goals for the website, how content integrates through the company’s other product lines and the overall quality of content. Previously she served as national executive editor and editor of the West Coast region for GlobeSt.com and Real Estate Forum, and was responsible for coverage of news and information pertaining to that vital real estate region. Prior to moving out to the Southern California office, she was Northeast bureau chief, covering New York City for GlobeSt.com. Her background includes a stint at InStyle Magazine, and as managing editor with New York Press, an alternative weekly New York City paper. In her career, she has also covered a variety of beats for M magazine, Arthur Frommer's Budget Travel, FashionLedge.com, and Co-Ed magazine. Dolce has also freelanced for a number of publications, including MSNBC.com and Museums New York magazine.
