29th Street Capital Buys San Diego Apartments for $97.5M

29th Street Capital has acquired Sunterra Apartments from Ideal Capital Group for $97.5 million. The acquisition marks the firm’s fourth purchase in the Southern California. Haven Residential, 29SC’s in-house property management company, will handle management and leasing.

Located in Oceanside, a city in the greater San Diego market, Sunterra Apartments is a class-B property with 240 units and a resort-style pool, two playgrounds, a sundeck with an outdoor fireplace and a fitness center. 29SC plans to execute a capital improvement plan with upgrades to unit interiors, including stainless steel appliances, quartz countertops, oval soaking tubs and modern white cabinetry, and the building exterior by updating the roof, wrapping balconies in wood paneling, and replacing windows and glass doors.

Shortly after the start of the pandemic, multifamily transactions in San Diego quickly came to a standstill due to a lack of for-sale opportunities. JLL’s Darcy Miramontes, said, “The appetite for investment in multifamily in San Diego continues to be strong and will be evident when more product comes to market.”

However, that trend quickly changed as uncertainty subsided and sellers began to bring properties to market. In 2021, Oceanside had attracted several major deals. In August, The Capella at Rancho del Oro traded hands for $110 million, making it the highest priced apartment transaction on record in Oceanside, a city in San Diego County. Property West Residential acquired the property from FPA Multifamily.

This year, Greystar Real Estate Partners sold EV Lofts, a 208-unit class-A apartment community in Downtown San Diego, to Griffis Residential. The building is located in the trendy and highly desirable East Village neighborhood, generating a high-level of investor interest. The sales price was not disclosed. EV Lofts is an affordable apartment living community in the East Village with rents an average of 30% lower than the surrounding high-rise residential towers. It was built in 2015 and features a rooftop deck, resident lounge, fitness center and a dog park; plus, it is powered by the Alfred resident tech platform.

Last year, 29SC purchased 28 multifamily assets totaling more than 6,500 units. Hunter Combs with Walker & Dunlop in San Diego brokered this off-market transaction, and John Montakab and Mark Grace with Walker & Dunlop arranged the financing.