A small apartment building in Ocean Beach on Bacon Street was just sold for $1.86 million. And it’s unfortunate what will probably happen next.
It’s vacant and 2175-77 Bacon St., is slated to be torn down. Among its multiple units, is a two-bedroom/one-bath unit and a studio. It’s unclear what the adjoining single-story building contains – or if it’s even part of the sale.
Conor Brennan, senior vice president, investments in Marcus & Millichap’s San Diego Downtown office was quoted by Times of San Diego:
“The property was only on the market for nine days and we were able to secure a non-contingent, all-cash offer from a buyer with a strong history of performance in buying similar deals. This sale signifies a strong sentiment of buyers towards the return of lower interest rates in the near future.”
“The buyer has optimism for future rate cuts and low-rate conventional refinance upon completion of construction.”
Now if someone could just translate that into English.
What’s happening here — without any inside or insider knowledge — is what is repeated across San Diego’s cityscape: old apartment buildings are torn down and replaced with expensive, slick new apartments that often are turned into short-term vacation rentals — especially here a the beach — or into unaffordable condos or upscale units.
Instead of being rehabbed and turned back into affordable housing. That’s the gist. That’s part of the problem with San Diego’s affordable housing crisis. We lose units that were on the market as affordable – then they’re allowed to deteriorate — and then there’s motivation to demolish them and replace them with unaffordable units or they’re just taken off the housing stock market completely.
Other details: The seller, Neil Family Trust, was represented by Kim Howard with Horizon Real Estate. The buyer, 2175 Bacon St San Diego, LLC, was procured by Brennan. Marcus & Millichap (NYSE: MMI) is a commercial real estate brokerage specializing in investment sales, financing, research and advisory services.
Great article… our office follows your write-ups regularly and we sell a lot of the buildings in OB. Totally understood that some of the new owners are creating high-end apartments that are seemingly unaffordable based on the norm. However, these renovated units are filling an already low-supply of condo-quality units that has been in high demand for the area based on seemingly endless lease applications for this higher-tier housing. This property was also deemed uninhabitable by the city and completely torn apart floor to ceiling on the interior. As I agree affordability must be a high consideration in future development in OB, I also think that there room for a balance of affordable units today against condo-quality units that have been built out of unliveable spaces (which are presently a good portion of recent sales). I walk several of these buildings regularly and believe me, local developers are doing the neighborhood a favor. I look forward to reading more of your material, we love your articles!
… and you live where? I notice you say “the neighborhood” not “my neighborhood.”