SAN DIEGO-Island Manor, a historically significant apartment property in San Diego, has traded hands. Built in 1908, the three-story, 28-unit property sold for $2.5 million. In the deal, Chris LaFornara acquired the building from 470 20th Street LLC. That company bought the property in 2000 for $735,000 or just over $26,000 per unit.Located within walking distance of Petco Park, in Downtown San Diego, the property went through significant rehabbing from the previous owner, according to Athan Ranglas, one of the brokers on the deal. Ranglas, along with Jules Arthur and Steve Huffman, all of the San Diego office of Phoenix-based Hendricks & Partners, negotiated the deal. According to Ranglas, the previous owner added new hardwood floors and appliances to the individual units. The property includes 9 studios, 17 one-bedroom and 2 two-bedroom units.Although the previous owners are successful condo converters in the San Diego area, the property will remain a straight apartment, according to Ranglas. He tells that due to its age and status as a historically significant property, Island Manor was not a candidate for a condo conversion. The property does “get to enjoy the Mills Act,” according to Ranglas, which provides a significant tax break to the owner of historically significant properties.Ranglas says that all apartment types have been selling well in San Diego, but that property already condo mapped have the most potential. “Condo conversions have pushed up the market,” Ranglas says. “It’s allowing current apartment owners huge windfalls.” The apartment owners are selling at 3-4% cap rates and buying new product at 5-5.5%, according to Ranglas. “Right off the bat, they are doubling their cash flow,” he adds.

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