F & F EL Cajon, LP has purchased Stratford Arms, a 35-unit apartment community located at 1397 East Washington Avenue in El Cajon, California, from private investor Hillgren Family Trust for $7.75 million. Kidder Mathews’ multifamily investment brokers Eric Comer, Jim Neil, and Merrick Matricardi represented both parties in the transaction.
“In the last 12 months, there have been 20 multifamily sales of properties with more than five units in the City of El Cajon,” says Comer. “At a sale price of $221,428 per unit, Stratford Arms represents the highest-price-per-unit transaction in El Cajon in the last 12 months.”
Stratford Arms is a mix of 29 townhomes and six single-story apartments, all of which are two-bedroom units. It is close to many amenities including parks, restaurants, and shopping, and it is within close proximity to I-8 and less than three miles from the El Cajon Trolley Station.
According to Marcus & Millichap’s Q1 2018 multifamily report, the El Cajon/Santee/Lakeside submarket had the lowest apartment-vacancy rates in Q4 2017 of all San Diego submarkets at 2.8 percent compared to the metro as a whole at 3.7 percent. With limited construction in the pipeline, buyers were combing the suburbs and closer-in neighborhoods looking for apartment deals. Multifamily asset values increased by double digits in both 2015 and 2016, prompting more owners to market properties last year, and a larger pool of listings translated to a 6.5 percent rise in transaction velocity, the report says.
Also, heightened competition for available properties lifted the average multifamily sale price in San Diego by 8.9 percent in 2017 to $244,300 per unit, M&M reports. The rise in pricing reduced the metro’s average cap rate by 20 basis points to 4.7 percent. The outlook is that diversified hiring is bolstering household formations in the region, underpinning rental demand. This and extremely tight class-C vacancy are buoying investor interest in the San Diego multifamily market.