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San Diego Plagued by ‘Good-Market’ Paradox

As published in by Carrie Rossenfeld
June 9, 2015

LA MESA, CA—The multifamily market in San Diego has been so strong—even through the recession—that finding property managers to hire and train who understand a down cycle is a challenge, Sunrise Management’s president and CEO Joe Greenblatt tells Sunrise has been tasked with managing the Quarry, La Mesa’s newest apartment community being developed by Silvergate Development with sustainable features and state-of-the-art amenities. spoke exclusively with Greenblatt about the project and what it takes to manage multifamily properties in San Diego. What are the challenges to managing multifamily properties in San Diego?
Greenblatt: San Diego is a great example of the “good-market paradox.” The rental market here has been so strong—even through the years of recession—in relative terms compared to many other cities, that there are lots of landlords, managers, operators and others in the multifamily-management business who have never known a down market. They really don’t understand customer service in the intensive way that I’ve been exposed to it in other markets, where you have to be good or you wouldn’t be successful. The challenge has been to recruit people into the business and train them in such a positive rental market environment to provide the level of service that we aspire to provide to the residents. Some residents have an expectation of a certain level of service, but I would opine that a majority of residents don’t: what they get is less than what it could be, and it’s a product of it being such a good landlord’s market for so many years. It’s been such a good market for so long that a lot of people in the business have never been in an open-market competitive situation that requires them to sharpen their skills because there is that demand. How would you characterize multifamily development in the La Mesa submarket?
Greenblatt: The La Mesa submarket self-divides into north of Highway 8 and south of the 8. There have been some developments north of the 8, but nothing south of the 8. This is the core of Downtown La Mesa, characterized by older inventory that has not been broadly upgraded and has a tremendous appetite for developments like the Quarry and what we’ve been able to bring into the marketplace. The enthusiasm among prospective renters has been so great. What is unique about the Quarry, and what trends does it exemplify?
Greenblatt: There’s a lot of attention being paid to being energy and resource efficient. The Quarry has a lot of sustainable features, including photovoltaic panels. We’re pursuing LEED certification, and it’s reflected in the design of the property. The product is very functional. There are private home entries into each apartment, it’s in a walkable location, and it’s leaning toward that urban/suburban locale with proximity to retail and the Downtown core of La Mesa. It’s a smoke-free community and pet friendly with hard-surface flooring throughout and is across from a public park—so it’s literally pet friendly in design and location. It’s very modern in terms of finishes and design, and it’s got great tones, granite countertops, energy-efficient appliances and double-paned windows. It’s in sharp contrast to the rest of the inventory in that area. What else should our readers know about the multifamily sector in this market?
Greenblatt: We’ve found that residents are hungry for new product. People want a lifestyle that simply wasn’t available in this submarket until the Quarry came online. Often, the residents have strong ties to the community. They want new, modern design and quality housing with amenities that the Quarry offers. It’s attracting younger demographics since local breweries have opened up nearby, but it’s also getting the Baby Boomers who aren’t selling their homes and want to stay in the community but don’t necessarily want to keep their equity tied up in a larger home.

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