Apartments in San Diego County Trade in One of Region’s Biggest Deals of 2021
Local Investor Buys Capella at Rancho del Oro Apartments in Oceanside, California, for $110 Million
The transaction for this property in Oceanside, California, was the city's highest-price apartment deal on record and the third-largest this year in the San Diego region. (CoStar)
By Lou Hirsh
CoStar News
August 16, 2021 | 2:44 P.M.
A $110 million apartment sale in Oceanside, California, is among the largest this year by total price in San Diego County and the highest-price multifamily deal on record for the region’s third-most populous city.
Brokers at Marcus & Millichap, which represented the seller and procured the buyer, said investment firm Property West Residential of San Diego acquired the 284-unit Capella at Rancho del Oro, recently rebranded as Elan Oceano, in a deal equating to $387,324 per unit. The seller of the property, built in 2001 at 4795 Frazee Road, was investment firm FPA Multifamily of San Francisco.
Christopher Zorbas, executive managing director with the brokerage firm’s Institutional Property Advisors division, said in a statement that pricing on the deal was heightened in part by limited apartment buying opportunities along the state Route 78 corridor, where “investors have adjusted their underwriting criteria to be more competitive.”
Most of the apartments along that corridor of northern San Diego County are garden-style properties built in the '60s, '70s and '80s, Zorbas said.
The Oceanside deal is San Diego County’s third-largest by total price so far in 2021 and the highest-priced on record for Oceanside, according to CoStar data. The North County apartment market, which includes Oceanside, has a current vacancy rate of 2.1%, tighter than the overall San Diego region’s 2.9%, and its average monthly rent of $2,092 is above the regional average after growing 11.7% in the past year.
The North County area is among the San Diego region’s most active places for investors, especially among “value-add” buyers looking to acquire and renovate older properties. “With high interest among both institutional and local parties, sales volume is typically among the highest in the metro, and the submarket provides an opportunity for investors to often get a foothold in the region for under the county’s average pricing,” said Joshua Ohl, director of market analytics for CoStar Group in San Diego.