Pacific View Luxury Apartment Complex Fetches $232M

San Diego-based American Assets Trust REIT has acquired the 533-unit, Class-A Pacific Ridge apartment complex for $232M, or $435/unit.

“Pacific Ridge was a high-profile deal, in an extremely desirable location,” Berkadia managing director Ed Rosen said.

Rosen, along with managing director John Chu and directors Kyle Pinkalla and Erin Dammen, repped the seller, a San Francisco-based investor.

He said the developer, Carmel Partners, built projects with very appealing features and tenants are willing to pay a premium to live there. Rents average $2,750/month, and Pacific Ridge tenants have incomes 42% higher than the average San Diego renter, Rosen said. While most apartment landlords require income 2.5 times the monthly rent, Pacific Ridge requires a 3:1 income-to-rent ratio.

Built in 2013, the Moroccan-style property is on 15 acres with unobstructed ocean views and resort-style features, including indoor and outdoor retreats, lounges, two saltwater pools and spas, and an outdoor grill and dining pavilion.

Rosen said the region’s low unemployment — 3.8% in April — and housing shortage, coupled with the property’s attractive features and prime location across the street from the University of San Diego campus will ensure long-term stabilization and continued rent growth. USD is a private Catholic university with an affluent student body. He said about half of Pacific Ridge tenants are university students.

“Our data shows that asking rents in San Diego are up 4.9% from Q1 2016,” Rosen said. “There’s a big shortage of apartments everywhere [except] in downtown San Diego.”