Originally published May 31, 2018
Michael Mills – the gigantic land owner of Ocean Beach – has just expanded his OB empire larger with the purchase of 16 units on the bluff at the end of Narragansett Avenue.
One of Mills’ trust has purchased 5101-5107 Narragansett Avenue, a 3-story apartment complex right on the coastal cliffs for $6.8 million – according to an industry source. The seller was William R. Mundt Trust.
The large structure, built in 1973, includes a mix of studios, one-, two- and three-bedroom apartments which range between 484 and 1,527 square feet on the 12,141-square-foot chunk of prime real estate cliffs.
What a deal! Michael Mills is soooo lucky, isn’t he! One of the agents who represented Mills declared:
“It is uncommon for an oceanfront property to become available on the market. This is only the fourth oceanfront apartment building over ten units to sell in San Diego County in the last 20 years.”
Michael Mills’ properties in Ocean Beach. Each red star represents a separate property.
Of course, the OB Rag has been following ol Michael Mills over the last few years. We’ve been trying to keep an updated list of his many, many units in OB and the surrounding neighborhoods – we have failed – and to map where all his units are.
Okay, just how many units does he own out right or through his various trusts?
In 2016, we counted 241 units, homes, condos and apartments. So, add another 16 just bought, and that’s 257 units. But we know there’s more – readers keep notifying us, saying ‘hey, my landlord is Michael Mills and my home isn’t on the list.’
Mills’ properties in the War Zone, northwest OB. Each red star represents a separate property.
So, why have we been keeping track of Mills? First, he has direct power over many of our neighbors – hundreds. Second, he hasn’t been the model landlord. In fact, we reported a couple years ago about his notoriety:
Mills owns a lot of property in Ocean Beach – many rental units. And he has a long history buying up properties, raising rents, and maintaining sub-standard living conditions.
In fact, back in 1998, a judge sentenced Mills to a year in jail after he pleaded no contest to 10 charges of maintaining substandard rental properties in Ocean Beach. The judge also placed Mills on three years probation, and one of his conditions of probation was to hire a professional management company to bring his properties up to code.
At the sentencing, the Deputy City Attorney hailed the victory over the slumlord, particularly since many of his tenants were low-income families with children. San Diego Source (1-28-1998)
Rumors have swirled for years about how many rental units Mills actually owns, so we set out… to find just a few of his properties.
And his places are scattered all over OB and parts of Point Loma. Yet, Mills has focused on the old “war zone” area of northwest OB. (See ‘War Zone’ map).
Large series of apartment buildings on 4600 block of Muir Ave.
At a tenants’ rally in June of 2016, one of the organizers was interviewed by Dave Rice – who writes for the San Diego Reader -and she told Rice:
“Michael Mills has…been paying cash for multi-unit buildings around O.B. and, after 60 days, raising rents. Some of the tenants who’ve remained in these buildings say they’re half empty now, and though he’s coming in and putting a little paint on, some flooring, but if you look at the properties he owns they’re really some of the gnarliest, most run-down buildings in O.B.”
One thing our map doesn’t show, are the multiple unit complexes and apartments.
For example, his property at 4955 Niagara – only 1 star on our map – has 37 units – his largest complex in OB, which he bought in 1991. His place at 4657 Muir – which takes up half a block – has 25 units.
Look at that map. See the list.
Here’s the outdated list:
{ 12 comments… read them below or add one }
What a loser…OB is filled with these rich old surly dudes who run slum lord housing (also looking at Bill on Del Monte ave.) …But are they Air bnbing?
See this is the sort of old breed of OBcean that we want to remove – the michael mills of the world.
Where do you get your information OBKid? Mills is a property owner, where does it say he lives in OB or that any of those “rich old surly dudes” you refer to live in OB? And, he clearly is not a loser, he’s worth millions. And he does not represent “old breed OBceans” either. You can dislike him and what he is doing, most of us do, but don’t paint him as an OBcean or representative of OB.
Maybe he will turn them into a homeless shelter.
What is meant by the term, ‘war zone’?
The old “War Zone” was northwest OB where cops, drug dealers, musicians, bikers, sailors – and many college students – mixed it up. It was a very lively neighborhood, with enough low-rent places that allowed many kinds of people to live and hang out there. A lot of people nowadays object to the term – it’s much more sedate there now, of course. Just a bit of OB’s colorful history. See this history of the rowdies of OB https://obrag.org/2015/05/history-of-the-rowdies-and-ruffians-of-ocean-beach/
Let them sit empty. And see how long his money will last.
We’re reposting this article about OB mega-landlord Michael Mills because all of a sudden on Thursday, there was tremendous interest in this 1 1/2 year old post.
Frank – I’d like to add a couple things I found interesting from this purchase from a real estate perspective.
First, the decision to purchase an older (easily over 15 years old) is interesting. My understanding of the new rent control laws is he cant raise rent more than 7% annually (feel free to correct me if I’m mistaken). This is pretty interesting because prop 13 taxes will reset with the purchase but not the rents. This can be a pretty tough situation from a landlord perspective if your taxes jump but your rent doesn’t.
Second, the apartment market is at an incredible high. Cap rates are the measure of how much you’re willing to pay for a property or how expensive it is per dollar of rent. Currently, cap rates for good location multi-family property a sub 5%. This means you’d need to own the property outright for 20 years to get your money back, ignoring price appreciation. The stock market has a price to earnings of 14.1 over the last 200 years or so meaning if you bought all the stock in a company, you’d get your money back after 14.1 years.
The only reason to buy this property from an economics perspective would be to tear it down and redevelop it. There may be provisions in the new rent control law that allows landlords to raise rent on redeveloped property. I’m not sure.
This looks like a terrible buy at the top of the market. It’s a very curious transaction.
I appreciate your perspective of not having giant landlords. It’s their right to buy property, but not to provide substandard or illegal maintenance. My landlord didn’t raise my rent because it’s her only source of income and I always pay on time with a cashiers check. I certainly like this arrangement and I’d think many OBceans would as well.
You don’t get that with giant landlords.
….just my two cents.
It makes sense that this complex is part of the Mills empire. It’s starting to look tatty and run-down. The bluff in front slipped a while ago and the solution seems to have been to put a tarp over the scar. That tarp subsequently disintegrated, more earth slipped and now the building is teetering on the unstable bluff. No remediation has been carried out at all. Seems about par for the Mills management system. Mills is no friend of OB.
Great comment, I learned a lot from your response, most individuals who comment in the OBRag, obviously have the intelligence of a ham sandwich.
We enjoyed our stay at 5080 Santa Monica for years; surfing the Pier year round. great friends & neighbors. The last 10 years owned by MM: Cheryl, Property Mgr; provided great service with a smile! With “Vacation Rentals”, OB became to busy & loud for our quality of life. We are still Obeachians!
Mike Mills is not destroying OB by just being a slumlord. He is destroying OB by turning 100s of units into AirBnB’s. He is a prime example of why San Diego is having a housing crisis. Mike Mills and others like them are driving up the cost of housing and forcing out long time residents of our beach towns.