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SAN DIEGO—Investors are demanding multifamily properties in the San Diego's North Park submarket, just north of Downtown, which is attracting young professionals, Colliers International's multifamily advisory group's Peter Scepanovic and Corey McHenry tell GlobeSt.com exclusively. The pair recently sold several multifamily buildings in this submarket, including a four-unit multifamily property located at 3827-33 Louisiana St., as part of the urbanization trend that's sweeping the country. We chatted with Scepanovic and McHenry about the multifamily sector in this submarket and how it compares to others in the San Diego market.
GlobeSt.com: What is the market like for multifamily sales in North Park?
Scepanovic: It's very strong. The market dynamics are very good. I would describe North Park, which is west of the I-805 and adjacent to the Hillcrest area directly west of it, as being an up-and-coming area. It was featured in a couple of magazines a couple of years ago as one of the more hip, upscale, urbanizing areas. It has a lot of cool little new restaurants going in at the 30th St. corridor, and it's attracting a young professional crowd that wants to be in an environment where they can walk to nice restaurants. It's very walkable. From an investment standpoint, the rent dynamics are very good, and there's more upscale development going in that fits that mold, so it's commanding higher rents as a result.
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GlobeSt.com: How does North Park compare to other San Diego submarkets?
Scepanovic: I think it's most similar to Hillcrest. What we've seen is the Downtown area flourish, and the areas closest to it have followed. Hillcrest flourished a little earlier, and North Park next. It's the expansion of that urbanization we're seeing in the central San Diego core, and it's primarily flowed into Hillcrest, North Park and University Heights, which a lot of people think of as part of North Park.
McHenry: It's a hip area, and it has a little bit of that hipster vibe and a lot of your foodie restaurants and hip kinds of stuff that young professionals want to live near. This has boosted rent and created a dynamic environment. A lot of buildings there are being substantially renovated, and 3827-33 Louisiana, which was just sold, has a really great class of tenant: young professionals, attorneys and tech people.
GlobeSt.com: What is the lender view on this product type in this market?
Scepanovic: There is no issue with lending. All of the multifamily lenders in every deal we've done want to lend in that area: JPMorgan Chase, Opus Bank. The Louisiana St. deal was an all-cash sale, which is not unusual. Typically, this type of buyer wants to buy for the long term, and they're buying in good areas with good future potential. It's still developing, and that's the way they view North Park from an investment standpoint.
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