w w w . A p a r t m e n t R e a l t y G r o u p . c o mTHE APARTMENT MARKET SPECIALISTS (858) 952-1031 | Info@ARG1031.comwww.ApartmentRealtyGroup.com

Ap ar tm en t Rea lt y Gr o u p , In c . | B R E #: 0 186 37 3 3225 1 S an D ie go A ven u e So u th Su i te 15 7 S an D i ego , CA 92 110

MARKET UPDATE:First Quarter 2016

SAN DIEGO COUNTY

SAN DIEGO COUNTY APARTMENT MARKET: March 2016

2016 is off to a strong start for the San Diego County rental market. Vacancy rates are steadily hovering just under threepercent county wide as the demand for rental housing increases due in part to the high price of home ownership. The lowvacancy rates will cause rents to continue to rise at a rate of three to five percent in most sub-markets. Another factor is thecompletion of fewer new apartment units scheduled for delivery in 2016 than in 2015. Going forward, the demand for qualityassets will remain high allowing sellers to remain firmly in control, receiving multiple offers on properties that are marketedproperly and priced reasonably.

The buyer pool is still vibrant with plenty of investors looking for opportunities, especially properties that are in needof stabilization or have a value-add component. Local and regional lenders continue to have an appetite for loans secured bymulti-family assets, but are requiring larger down payments - upwards of forty percent or higher - to offset diminishing debtcoverage ratios as the price of apartment buildings continue to increase and returns continue to shrink.

CURRENT MARKET CONDITIONS:

↘UNEMPLOYMENT: San Diego County unemployment rate is 4.7%

↗RENT: Rents are expected to rise county-wide by 3% - 4% in 2016

↘VACANCY: Currently 2.6% down from 4.1% in the Spring of 2015

VACANCY RATES BY REGION:

NORTH COUNTY - 2.4 percent

CITY OF SAN DIEGO - 2.8 percent

EAST COUNTY - 2.4 percent

SOUTH BAY - 2.5 percent

AVG CAP AVG GRM # of Sales AVG $/Unit AVG $/SFNORTH COASTAL: 3.97% 13.57 18 $208,513 $276

NORTH INLAND: 5.29% 11.56 40 $148,081 $174

CENTRAL COASTAL: 4.12% 15.41 42 $236,391 $374

CENTRAL SAN DIEGO: 4.84% 12.86 170 $176,098 $245

EAST COUNTY: 5.12% 11.77 47 $148,483 $180

SOUTH BAY: 5.21% 12.16 36 $165,552 $193

SAN DIEGO COUNTY SALES STATS (5 - 50 Units) January 1, 2015 – December 31, 2015:

VACANCY DATA IS COLLECTED FROM THE SAN DIEGO COUNTY APARTMENT ASSOCIATION (SDCAA) FALL 2015 San Diego Vacancy & Rental Rate Survey.' SALES DATA STATISTICS AREPROVIDED VIA COSTAR COMPS: 5-50 UNITS FROM 1/1/2015 – 12/31/2015. UNEMPLOYMENT SOURCE: CA EDD March 4, 2016). This information is for discussion purposes only and we believe to bereliable however, we make no representations or warranties, expressed or implied, as to the accuracy of the information. References to square footage or age are approximate. Principals must verify theinformation and bears all risk for any inaccuracies. Apartment Realty Group (ARG) and/or any affiliate and/or agent(s) is not qualified to provide, and have not been contracted to provide, legal, financial, or taxadvice, and that any such advice regarding any investment by the recipients must be obtained from the recipients’ attorney, accountant, or tax professional.

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B e l o w i s a S a m p l e o f R e c e n t S o l d T r a n s a c t i o n s

4325 Marlborough AvenueSan Diego, CA 92105TYPE: Multi-FamilySIZE: 8 UnitsPRICE: $1,315,000

4812 70th StreetSan Diego, CA 92115TYPE: Multi-FamilySIZE: 25 UnitsPRICE: $3,600,000

4345 32nd StreetSan Diego, CA 92116TYPE: Multi-FamilySIZE: 5 UnitsPRICE: $1,065,000

SOLD by ARG SOLD by ARG

4502 40th StreetSan Diego, CA 92116TYPE: Multi-FamilySIZE: 6 UnitsPRICE: $1,150,000

6033-41 Brooklyn AvenueSan Diego, CA 92114TYPE: Multi-FamilySIZE: 20 UnitsPRICE: $2,025,000

4149 Central AvenueSan Diego, CA 92105TYPE: Multi-FamilySIZE: 14 UnitsPRICE: $1,975,000

SOLD by ARGSOLD by ARGSOLD by ARG

SOLD by ARG

368-370 Roosevelt StreetChula Vista, CA 91910TYPE: Multi-FamilySIZE: 8 UnitsPRICE: $1,625,000

SOLD by ARG SOLD by ARG

3029 J StreetSan Diego, CA 92102TYPE: Multi-FamilySIZE: 4 UnitsPRICE: $615,000

4044 Texas StreetSan Diego, CA 92104TYPE: Multi-FamilySIZE: 8 UnitsPRICE: $1,350,000

SOLD by ARG

SOLD by ARG

381 Millar AvenueEl Cajon, CA 92020TYPE: Multi-FamilySIZE: 9 UnitsPRICE: $1,305,500

422 Avocado AvenueEl Cajon, CA 92021TYPE: Multi-FamilySIZE: 4 UnitsPRICE: $764,000

925 Hoover AvenueNational City, CA 91950TYPE: Multi-FamilySIZE: 10 UnitsPRICE: $1,300,000

SOLD by ARG SOLD by ARG