San Diego-Area M-F Trades for $69M

Three R&V Management Corp.-sponsored partnerships–Hillcrest Montecito L.P., VLD Bonnie Brae L.P. and Vista Bella Terra L.P.–have scooped up Bella Terra, a 460-unit apartment community in Vista, a city in northern San Diego County, from RREEF for $69.5 million. Located at 365 Pomelo Drive, just south of Highway 78 and west of Melrose Drive, Bella Terra comprises one-, two- and three-bedroom units ranging from 700 square feet to 1,160 square feet. Among the amenities included are two swimming pools and spas, an on-site clubhouse, private patios or balconies/storage facilities, a meeting room, a fitness center and a playground. Ed Rosen, John Chu and Alejandro Lombrozo of Cushman & Wakefield Inc.’s San Diego office, represented all parties involved. While the economic meltdown continues to shake up property types and markets across the country, Rosen, a Cushman executive director, categorizes the health of North San Diego County’s multi-family sector as “very strong right now,” particularly as the weak housing market continues to bode well for the apartment market. During the home-buying craze, “a lot of renters became buyers that shouldn’t have become buyers,” he said. “Now they’re going back to being renters by defaulting. That’s putting back in proportion the amount of renters that should’ve been in the market to begin with. And at the same time there is very little, if any, new supply.” In comparison with other markets in California, particularly the Inland Empire, Northern San Diego is faring significantly better. In the Inland Empire, “there is a much more problematic shadow market, as well as a softening rental market in the closer inland,” Rosen said. “The stability is in the closer infill areas. The outlying areas seem to be getting affected quicker than any of the other areas,” while the contraction of occupancy and rent levels seems to be much deeper, he added. Overall however, the number of multi-family transactions in San Diego as a whole has experienced a year-over-year decline from September 2007 to September 2008. The number of apartment sales transactions in the second quarter came in at 139, a 7.3 percent drop from the 150 notched in the same period a year ago, according to a Cushman & Wakefield study released in September. But the report adds that the rate of reduction in sales prices trails behind the decline in sales.