$157 million multifamily sale will help preserve middle income rentals in San Diego County

Multifamily Portfolio

Northmarq arranges 314-unit portfolio sale to Waterford Property Company and California Statewide Community Development Authority

SAN DIEGO, CALIFORNIA (December 29, 2021) – Middle-income renters battling rising housing costs in California are getting some welcome relief. Newport Beach, Calif.-based Lyon Living recently sold three properties in Escondido, Calif. to a public-private partnership that has been snapping up properties to help preserve “essential” rental housing throughout California. 

Waterford Property Company and the California Statewide Community Development Authority (CSCDA) have partnered to buy the 314-unit Lyon Living portfolio for $157 million. “The state is issuing tax-exempt bonds to acquire multifamily properties where they can preserve or lower rents to a level that serves the forgotten middle – the first-responders, teachers and other professions that provide a critical backbone to our communities,” said Kyle Pinkalla, Managing Director of Northmarq’s San Diego office. Pinkalla and Northmarq Associate Vice President Erik Anderson represented the seller in the transaction.

All three of the properties are Class A, newer built assets. The 126-unit Rowan Apartments was completed in 2021; the 112-unit Alcove Apartments in 2019; and the 76-unit Haven76 Apartments in 2014. The low-cost bond financing allowed the buyers to be aggressive on pricing with units selling at $500,000 per unit. As part of the CSCDA’s middle income housing program in California, the communities will now serve residents making between 60 and 120 percent of the area median income (AMI) for San Diego County. 

The Lyon Living portfolio is the third major apartment sale in the city of Escondido to close this month – all with similar strategies to preserve middle income housing options. “This creates an interesting dynamic for the Escondido market as it takes 1,031 units out of the current inventory of market-rate housing,” said Pinkalla. “That shift in supply is likely to boost demand and improve pricing power for existing market-rate assets, while also sparking fresh interest in development and redevelopment opportunities,” he added.

Northmarq is a full-service capital markets resource for commercial real estate investors, offering seamless collaboration with top experts in debt, equity, investment sales, loan servicing, and fund management. The company combines industry-leading capabilities with a flexible structure, enabling its national team of experienced professionals to create innovative solutions for clients. Northmarq’s solid foundation and entrepreneurial approach have built an annual transaction volume of more than $39 billion and a loan servicing portfolio of more than $76 billion. Through the 2022 acquisition of Stan Johnson Company, Northmarq established itself as a provider of opportunities across all major asset classes. For more information, visit www.Northmarq.com.

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