Oceanside’s The Dylan Apartments Trades for $74M
High home prices have helped to fuel activity and demand in Oceanside’s multifamily market.
The Dylan, a 208-unit apartment building in Oceanside, has traded hands for $74.1 million. 29th Street Capital sold the property to an investor operating as 550 Los Arbolitos Owner LLC. The property is located near Downtown Oceanside and the Oceanside Pier, as well as major employment hubs and universities.
Marcus & Millichap’s Institutional Property Advisors brokered the deal. Christopher Zorbas, Alexander Garcia, Jr. and Tyler J. Martin represented the seller and secured the buyer in the deal. Half of the interior units were renovated at the time of the sale, providing some upside for the buyer through completion of the upgrades. The property has two swimming pools, two spas, a gym and a business center for residents.
Oceanside is a thriving apartment market. Like much of California, the city has had rapidly rising home sales in the last year, reaching new records. The activity has kept many would-be homebuyers in rental units, driving low vacancy rates and putting upward pressure on rents, according to Zorbas, an executive managing director of investments at IPA. At an average of $1,850, rents at the Dylan are 42% less than the average cost of owning a home in the market.
Oceanside is located in the San Diego apartment market, which has fared well through the pandemic. Like most of the country, there were bumps in the road early on. In an interview with GlobeSt.com from June 2020, JLL’s Darcy Miramontes, said there were no multifamily sales since the onset of the pandemic. Demand, however, has come roaring back. In May, Blackstone announced plans to purchase a 66-property apartment portfolio from Conrad Prebys Foundation for $1 billion. It is the largest transaction in San Diego history, and will make the New York-based private equity firm one of the largest apartment owners in San Diego.
Blackstone is purchasing the assets in partnership with TruAmerica Multifamily. The deal totals 5,800 apartment units, bringing Blackstone’s total market share to 6,700 units with a value of more than $5 billion. The investor plans to make $100 million in improvements on the properties.