A joint venture between Stratford Partners and LLJ has acquired a residential complex comprising 189 units in northern San Diego County. The joint venture paid US$33.6 million for the Pacifica Palms Apartments located at 1861 East Washington Avenue in Escondido. This was reported by Institutional Property Advisors (IPA), a division of Marcus & Millichap. The transaction price equates to approximately US$178,000 per unit.
The property was divested by Pacifica Palms LLC, a company led by David J. Snodgrass and Barbara Snodgrass, according to PropertyShark documents. The Pacifica Palms complex is a gated community that includes 20 buildings on an eight-acre site on East Washington Avenue. It is situated approximately 2.5 miles from downtown Escondido. The development of the complex occurred over 60 years ago.
Strategic Acquisition in a Tight Market
Chris Zorbas and Alexander Garcia Jr. of IPA represented the seller and sourced the buyer. Zorbas described the property as a rare opportunity to acquire a large value-add multi-family asset in a submarket with limited supply. Zorbas noted that the Escondido submarket has limited availability of multi-family properties of this size.
Garcia highlighted the growing disparity between rental and ownership costs. Property prices in Escondido have risen by 19 per cent since 2021, according to IPA. Garcia stated that the discrepancy between the monthly cost of living for rentals versus ownership should maintain low vacancy rates and intensify upward pressure on rents in Escondido for the foreseeable future.
San Diego Market Development
The multi-family market in San Diego remains tight. The vacancy rate stood at 4.2 per cent at the beginning of this year, and average effective rents amounted to US$2,832 per month. This is according to the latest multi-family report from Marcus & Millichap. Transaction volume also improved by 25 per cent in the twelve months to March. Escondido is among the tighter and more affordable submarkets, where low vacancy rates are expected to persist.
