OCEANSIDE, CA—A lot of institutional money is allocated specifically for Southern California multifamily assets in 2016, ARA Newmark's managing director Tyler Martin tells GlobeSt.com. The firm recently facilitated the sale of the Timbers Apartments, a 208-unit apartment community here, by Timbers Strata L.P. to a private-equity real estate firm in an off-market transaction. Martin and fellow director Bryan Schellinger served as advisors to both the buyer and the seller in this transaction. We spoke exclusively with Martin about the appeal of the San Diego multifamily market and what investors are looking for in Southern California multifamily in general.

GlobeSt.com: What do your clients like about the San Diego multifamily market?

Martin: Just like all investors anywhere, our clients look for a high-growth area, and there are certain areas of San Diego that are better than others. Our clients want to be in a market that is strong—this particular deal in Northern San Diego County is in a great area with higher income levels. 

GlobeSt.com: What else do your clients look for when purchasing a multifamily asset?

Martin: Different clients have different acquisition criteria. Private investors look for high yield and cash flow as well as long-term appreciation; certain groups with institutional-equity partners look to buy deals and add value to them to gain the upside in better operations, interior renovations and making money off the promote.

GlobeSt.com: What are the strengths of the Southern California multifamily market?

Martin: This region hasn't seen the rent growth that Northern California has seen, yet a lot of people think that's yet to come. Everyone wants to be in Southern California; it's a highly desirable area. Ultimately, there will be a lot more growth. The population is increasing, and there are going to be more jobs. There's not nearly as much saturation as other markets in the country as far as new inventory coming online. There are areas with a lot of new development in Southern California, but compared to some other markets throughout the nation, absorption of the newer product shouldn't be a concern.

GlobeSt.com: What trends do you see taking hold for this market in 2016?

Martin: There's still going to be a lot of investor activity in Southern California no matter what interest rates and cap rates do. There's a lot of institutional money out there that is allocated specifically for Southern California. The market is going to continue to remain very strong and see more rent growth.