As you can see from the data accumulated from CoStar, a company specializing in market research (the accompanying information box), the average purchase price has risen from $1.33 million in 2010 to $1.75 million in 2012. There were a total of nine completed transactions in 2010 and 2011 and seven completed transactions in 2012.
We are nearly halfway through 2013 and not a single transaction has been completed. Why has the apartment market in Ocean Beach stalled? There are currently seven apartment buildings listed for sale and only one of the seven is in escrow. Capitalization rates — that is, taking the net operating income from an apartment complex and dividing it by the capitalization rate it would yield for the approximate current value of the complex — are still historically low, which favors sellers.
However, sellers are mostly “concerned with finding an exchange property,” said local apartment owner Donna V. What will the second half of 2013 look like in Ocean Beach? Will Ocean Beach have at least one completed apartment transaction?
It’s neighboring Point Loma in the 92106 ZIP code, already has six completed apartment transactions totaling $13.32 million in volume.
— Tony Franco is a commercial real-estate expert in Pacific Beach. He can be reached at (858) 717-1697.