San Diego Multifamily Update
San Diego Apartment Market Overview - March 2011

There have been many changes to the residential investment market in San Diego County over the past few
years. As the global economy has suffered, San Diego Income properties have had difficulties as well. Prices
were bid up for many years by condominium converters looking for ready made product, and the market was flush
with easier financing by many banks no longer in existence today. This combination of demand and financing help
fuel residential investment property appreciation rarely seen before.

However the multifamily market faired quite well because it has always centered more on income rather than "what
the last buyer paid" like the SFR market. Rents have dropped only a few percent as foreclosed homeowners
sought rental alternatives, absorbing many of the vacancies created by the downturn. The forecast for 2010 is
positive as experts anticipate vacancy rates to drop and rental rates to increase.

Realfacts, a Novato Ca. data company that monitors 37 apartment markets around the country including 24 in
California says San Diego is on the mend. San Diego is poised for recovery unless something really goes wrong
in the national economy. Realfacts listed San Diego’s average rent at $1,357 in the fourth quarter, down 1.5%
from the third quarter and off 2.8% year over year. A pretty good report considering how the economy has fared
as a whole in the past few years.

As the economy recovers and new jobs are created, the San Diego multifamily market should be a key
beneficiary. In addition to the many reason people move to San Diego, an expanded military presence will likely
be with us for years to come. Base housing cannot keep up with the expanding Marines and Navy base growth. In
the spring of 2010 the aircraft carrier Carl Vinson with a crew of 3,200 will become home ported in San Diego.
With the carrier Nimitz returning this spring and joining the Ronald Reagan, which is in port for maintenance, the
military demand on apartments will help further increase rental demand.

Amid two ongoing wars and a growing uneasiness about China’s military ambitions, the Pentagon plans to largely
strengthen San Diego County’s Navy and Marine Corps establishment, according to a long-range-strategy
document released this week. The report, prepared every four years and known as the Quadrennial Defense
Review, continues an emphasis on building ships and remotely controlled vehicles-potentially good news for local
manufacturers.

The plan means the Marine Corps will continue at a head count of about 202,000, the strength it has built toward
since 9-11-01. The “Marine-making” factories – west coast recruiting commands and boot camps, based in San
Diego, will continue to hum at high speed.  

If you would like some assistance from a Multi-Family expert (click here) or call the office 760-690-4400
x118.
Prestige Properties & Finance, a Real Estate & Mortgage Broker
2658 Del Mar Heights Road, Suite 207, Del Mar, CA 92014
Ph. 858-484-3446 / 619-568-3800 / 760-690-4400 :: Fax 858-484-3577
Licensed by the California Dept. of Real Estate. License #01153458
An equal opportunity Real Estate & Finance Company. All information deemed reliable but not guaranteed.
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