POWAY, CA—Walkability and livability make apartment properties, particularly in suburban markets, especially attractive to both investors and tenants, CBRE broker Kevin Mulhern tells GlobeSt.com. Mulhern was part of a team that recently represented seller Fairfield Township LLC in the sale of 193-unit Summerlyn Apartments at 13409 Midland Rd. here for $41.2 million to an affiliate of Pacific Urban Residential. The region is in high demand by both investors and tenants, the latter of which are attracted to the Poway school system, one of the highest rated in the country and within walking distance of the property. We spoke exclusively with Mulhern about the sale and the multifamily sector in this submarket.

GlobeSt.com: How would you characterize the market for multifamily properties in Poway?

Mulhern: On the operational level, it's extremely strong right now. There's virtually no vacancy in Poway whatsoever—98% occupancy overall, with normal being 95%—so it's really tight as a drum. Why is this so? There's not a lot of stock in Poway. It's got a lot of homes, but not a lot of rental properties, especially not larger rental properties that are professionally operated. There's also a lot of demand for these properties since there's a lot of employment in the region by many big employers. The housing stock has been stagnant for most of the last 15 years, and there have only been a handful of projects built in the entire corridor. Nothing has been built in the last 20 years in the market-rate sector, so there's a supply/demand imbalance.

GlobeSt.com: What types of apartment properties are being sought there, and which are selling best?

Mulhern: Not just in Poway, but in all of Southern California, investors are most interested in deals they feel have value-add potential. They want properties that can be physically improved to achieve better rents and move them from maybe a C+ to a B+. The value-add sector is the hottest sector right now, but there's demand across the board. There are plenty of buyers for core, A+ properties as well; there's demand in every facet of our business right now.

GlobeSt.com: What are the demographics of renters in this market?

Mulhern: Poway is generally a family market. The thing that drives renters out there, besides where they work, is the public school system. Poway Unified is one of the best in the county, and when you're a family, where you live and what you do relates to the kids. Also, the quality of life is a driver. Poway is close in to everything you need and is relatively close to the coast and Downtown, but it's definitely more of a country style of living out there. It's not as congested as living really close in, and families particularly like that, too.

GlobeSt.com: Is there anything else our readers should know about the Summerlyn Apartments deal?

Mulhern: It's in a great location, close to a lot of retail including a Lowe's and supermarkets. As it relates to multifamily, we talk a lot about people being fixated on walk scores, and generally in suburban properties, walkability is less than great. But this property has walkability that's uniquely good for a suburban property. Also, the prior owner, Fairfield Residential, performed upgrades on the property, so it really showed well, and that's one of the reasons why the buyer was interested.