San Diego multifamily sales have come to a standstill. According to JLL’s Darcy Miramontes, there have been no multifamily sales since the onset of the pandemic. The halt in sales, however, isn’t reflective of demand, which remains strong. Instead, the lack of transactions is indicative of the market uncertainty, particularly in the near term.
“Multifamily investment activity has slowed quite a bit. Most owners and operators are focused on operations, including tenant retention, COVID protocols and so on,” Miramontes, managing director at JLL, tells GlobeSt.com. “However, the appetite for investment in multifamily in San Diego continues to be strong and will be evident when more product comes to market.”
Because there have been no transactions since the start of the pandemic, pricing trends and investor activity trends haven’t yet emerged. In terms of investor trends, Miramontes doesn’t expect to see a change from the pre-pandemic environment. “San Diego is unique in that we have a large contingent of private investors that compete with the institutional investors chasing multifamily in San Diego,” she says. “This has been true for many years, and offers a diverse field of multifamily ownership across the county.”
In the same vein, she hasn’t yet seen any impact on pricing, and predicting price fluctuations can be challenging. “There have not been any multifamily investment sale closings since COVID hit, so there is no definitive answer on pricing,” she says. “With that being said, generally San Diego multifamily fundamentals remain intact, including low supply and geographic barriers to entry.”
Investors are still actively looking for opportunities in all multifamily asset classes, class-A, B and C, but Miramontes says that strategies have shifted. “Influencing factors include, business plan, anticipated length of ownership, loan terms, and financial return expectations,” she explains.
Pricing and available opportunities are the two biggest hurdles keeping investors from buying and moving forward. This was true before the pandemic, but it is certainly true now. “There are very few opportunities to buy multifamily in San Diego, and that is more relevant during COVID,” says Miramontes. “When there are opportunities, investors need to move quickly and aggressively to purchase multifamily in San Diego knowing there is a robust field of competitors.”
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June 15, 2020 at 03:00PM
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San Diego Multifamily Sales Come to a Standstill - GlobeSt.com
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