Bay Pointe apartments in PB
By Valerie Stahl / Tablet / July 4, 2023
The Hotel del Coronado’s Victorian red turrets peak above the sand dunes off the coast of San Diego. Developed by two industrialists in 1888 at the height of the Gilded Age, the “Hotel Del” serves as an iconic California backdrop, including in the classic 1959 film Some Like It Hot. A recent $400 million renovation added over 15,000 square feet of event space to the already expansive oceanfront campus.
Just 10 miles north, in another oceanside neighborhood called Pacific Beach, sits Bay Pointe Apartments, a 1960s era garden style apartment complex with over 500 units spread across multiple sand-colored buildings.
What do the two complexes have in common? They’re both owned by the New York-based private equity firm Blackstone, as are hundreds of thousands of other properties across the country.
Blackstone Real Estate Income Trust (BREIT) acquired a majority stake in the Hotel Del in 2011 for $600 million.
Ten years later, in one of the largest known real estate transactions in San Diego’s history, Blackstone purchased 66 residential complexes across the county for over $1 billion, including Bay Pointe Apartments. Many of the units in these buildings were previously classified as “naturally occurring affordable housing,” meaning that they had significantly below-market rents catering to working families in a city that, like many in America, is facing a stark affordability crisis.
Nearly overnight, 5,800 households in America’s “finest city” became tenants of the private equity behemoth.
With this trend only increasing in San Diego—and in cities across the U.S.—it is worth asking: What happens when your home, doctor’s office, or favorite local restaurant gets bought up by private equity?
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Valerie Stahl is an Assistant Professor of City Planning at San Diego State University.
{ 7 comments… read them below or add one }
To all supply-side “liberals” I ask, what work is being done to disincentivize non-primary residence (owner occupant) uses of housing here in San Diego? Supply-side solutions are heavily diluted by actors in the market not looking for personal homes.
Have to ask the mayor…….oh wait, he doesn’t care.
He cares. It’s obvious only options that greatly benefit capital interests are explored (supply-side) in any sort of meaningful way. Because he cares about his future campaigns and their funding.
2024 can’t come soon enough. Although, the horrific damage done to communities will last long after he is gone.
What level of government should best act against these real estate/hedge fund entities? City? State? Federal? Are they being regulated anywhere? Or have all the public officials been bought off?
At least you are asking these questions. Large corporations, and even local landlords are just that “lords” over working folks related to rental costs.
I’m not a big fan of these corporate portfolios, but when someone is trying to raise funds and intends to sell 6,000 apartments in one swing, there aren’t too many non-corporate entities that can play at that level. It would have taken years to sell off those 60+ buildings to individual buyers.
A good number of the properties that were involved in the sale had poor and unresponsive management.