The demand for multi-family housing continues to increase as millennials seek to rent apartments rather than buy a home. As developers continue to construct apartment buildings, there will be an increase in supply, therefore, rents will have to flatten out to accommodate the market demand in San Diego. Lenders willing to lend on apartment buildings are driving values up, therefore, there is no short term room for growth or any upside potential in the multi-family industry. Therefore, investors should look to office, retail, industrial commercial properties for higher yield.
Excerpts from Article: “According to data from Civic San Diego and the nonprofit Downtown San Diego Partnership, downtown as of December 2014 had 2,109 apartments and condos under construction. That number is greater than the total 1,695 units completed in 2010, 2011, 2012, 2013 and 2014 combined — and in 2011, no apartments were completed.”
“…an additional 14 projects that would bring 2,800 more apartments and condos with adjacent retail to the downtown area.”
“Civic San Diego recently approved plans for the development’s first residential project, known as Broadstone Makers Quarter, a 269-unit apartment building with 5,000 square feet of retail, being built by Alliance Realty Partners LLC.”
Citiation & Link: Hirsch, Lou. 6 March 2015.”Downtown Draw: Millennials Keep Coming; Hope Is for More Businesses to Follow,” San Diego Business Journal. 24 March 2015. http://www.sdbj.com/news/2015/mar/06/downtown-draw/?page=1&
Picture & Link: Hirsch, Lou. 6 March 2015. “Downtown Draw: Millennials Keep Coming; Hope Is for More Businesses to Follow,” San Diego Business Journal. 24 March 2015. http://www.sdbj.com/news/2015/mar/06/downtown-draw/?page=1&