AMG Evergreen Apartments, L.P. has acquired a 24-unit apartment building located at 1770 Evergreen Street in San Diego’s Point Loma submarket for just under $8 million. The seller was Kathryn Hattox Trust.
The apartment building was built in 1965. It consists of one-bedroom and two-bedroom units, many of which have views over the bay and city skyline.
Kidder Mathews’ multifamily brokers Eric Comer, Jim Neil, and Merrick Matricardi represented the buyer. The seller was represented by Jim Scott of Scott & Quinn Real Estate. The property will be managed by Altas Management Group, a local apartment management company.
According to Marcus & Millichap’s (M&M’s) Q1 apartment report for San Diego, record pricing supported a flood of new listings in 2017, trans¬lating to cycle-strong transaction activity and $2.7 billion in sales volume. Six higher-quality properties in San Diego suburbs or Vista accounted for nearly 40 percent of this total.
M&M also reports that class-C transactions have driven recent deal flow. A growing mix of local and Southern California investors covet this property type, while vacancy hovers in the 1 percent range metrowide. Buyers targeting upside-producing assets in La Jolla, Carlsbad, and the Balboa Park area accept 2 percent to 3 percent yields. Investors with an eye for below-average pricing pursue listings in East San Diego, El Cajon, and Vista, where 5 percent cap rates are available.
Buyers targeting class-B properties face stiff competition from Bay Area- and Orange County-based firms, according to M&M’s report. Cities along the 78 Corridor represent popular spots for buyers seeking low-4 percent to high-4 percent returns. Those with a preference for older class-B space at below-average pricing are lured to La Mesa and El Cajon.