Fjellestad of FBS in 91945-946 Quotes RE Experts to Emphasize Urgency & Necessity to become a Rental Owner in San Diego County

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Rents to jump over next five

By Jonathan Horn


Over the next five years, rents in San Diego County are expected to rise
almost twice as fast as they did in the preceding decade, according to
projections by CBRE.

From 2004 to 2014, the average rent in San Diego County rose from $1,242 to
$1,542 per month, a 24 percent increase. By 2019, the average rent is expected
to hit $1,830 per month, 19 percent more than the current average, said Dixie
Hall, a CBRE apartment specialist.

“If we weren’t under supplied, we’d have much higher vacancy and we wouldn’t
be seeing the rent raises that we are,” Hall said. “And we wouldn’t be seeing
people paying $2,000 for a one bedroom.”

Speaking to about 200 people at a panel held Thursday by the San Diego County
Apartment Association and the Certified Commercial Investment Member San Diego
chapter, Hall said demand for rentals has increased because of three major
factors: millenials are moving out of their parents’ homes, previous homeowners
now choose to rent, and others still have credit issues from the Great Recession
and can’t qualify for a mortgage.

The vacancy rate in San Diego County is about 3.7 percent, below a stable
market, which would have vacancies around 5 percent, said moderator Robert
Vallera, senior vice president of VOIT real-estate services. Another report,
released Thursday by Cassidy Turley, calculated San Diego County’s vacancy rate
as 2.6 percent, second lowest in the nation after San Jose.

CBRE reports that it is tracking 8,600 new units under construction, with
1,600 of them downtown. That’s where most of the demand for new units exists,
said Peter Burley, who directs the Rosenthal Center for Real Estate Studies of

“The millenials are distinctly urban, preferring public transportation,
walkable neighborhoods, flexible work environments and easy access to social
interaction,” he said. “They don’t drive.”

Hall said the new units being built, while expensive, are highly amenitized,
with fire pits, pool decks, barbecues, large gyms and clubhouses. “You would
want to live in these properties,” she said. “Residents today want to socialize,
they want to be outside, they don’t want to be trapped in their apartment.”

Marco Sessa, senior vice president of Sudberry Properties, in charge of the
expansive Civita mixed-use community in Mission Valley, said developers have a
hard time responding to the demand for more units.

“It’s almost impossible to get things approved and it takes a very long
time,” he said. “Unfortunately even with the amount of deliveries that are
expected in the next few years, it is by far the demand exceeds the supply, not
because we don’t want to build it but because it’s very difficult to get those
projects actually out of the ground.”

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