Daily Business Report — Aug. 18, 2010
San Diego building contractors are falling over each other to feed on the abundance of civic projects coming online at the same time. Read how the rush is affecting the job market, prices and the economy in the August issue of San Diego Metropolitan Magazine.
County Home Sales Decline
San Diego County home sales in July totaled 3,070 — a decline of 800 from June and a 19.4 percent plummet from July of last year, according to a report by MDA DataQuick of San Diego. The median price paid for a home in the county was $338,000, down from $335,500 in June and above the $320,000 price recorded in June 2009.
July 2010 home sales: 3,070
July 2009 home sales: 3,885
Home sales in Southern California (San Diego, Los Angeles, Riverside, Ventura, San Bernardino and Orange counties) saw their biggest year-over-year drop in more than two years in July as the market lost most of the boost from the federal home buyer tax credits, MDA DataQuick said. The median sale price dipped for the second month in a row, the result of a shaky economic recovery, continued uncertainty about jobs and the expiring tax breaks.
A total of 18,946 new and resale homes were sold in the six-county area, down 20.6 percent from 23,871 in June and down 21.4 percent from 24,104 for July 2009. This was the slowest July since 2007, when 17,867 homes were sold, and the second-slowest since July 1995, when 16,225 sold. Last month’s sales were 27.4 percent lower than the July average of 26,085 sales since 1988, when DataQuick’s statistics begin. The average change in sales between June and July is a 6.7 percent decline – about one-third the drop seen this year.
Last month’s 21.4 percent sales drop from a year ago marked the steepest year-over-year decline for Southland sales since March 2008, when sales fell 41.4 percent.
“It appears some of the sales that normally would have occurred in July were instead tugged into June or even May as buyers tried to take advantage of the expiring tax credits,” said John Walsh, MDA DataQuick president. “Some of last month’s underlying technical numbers were largely flat, indicating that the market is treading water. “We do expect some sideways buying and selling to kick in, especially among homeowners who have owned for more than seven years and didn’t take out equity during the frenzy.”
The median price paid for a Southland home was $295,000 last month. That was down 1.7 percent from $300,000 in June, and up 10.1 percent from $268,000 for July 2009.
Foreclosure resales accounted for 34.2 percent of the resale market last month, up from 32.8 percent in June but down from 43.4 percent a year ago.
Poway Mobile Home Park Sells for $38.3 Million
Poway Royal Estates, a 399-space, 51-acre mobile home park in Poway, has been sold for $38.3 million — or $95,990 per space — to Hometown America LLC, a company that invests in and manages manufactured home parks throughout the United States. The city of Poway was the seller, represented in the transaction by Douglas Danny of Marcus & Millichap’s Manufactured Home Communities Group in San Diego. “Poway Royal Estates is one of the premier manufactured home communities in Southern California,” said Danny. “We received 11 offers for the property in 28 days.” The property was constructed in 1972 at 13300 Alpine Drive. The park is surrounded by single-family residential developments, commercial office space, retail centers and open space. Poway Royal Estates consists of almost all doublewide homes on all doublewide sites. There are 396 revenue-generating sites, one vacant park-owned home and two park-owned employee homes. The sites measure from 40 feet to 42 feet in width and from 70 feet to 74 feet in length. Amenities include two clubhouses, pools and RV storage. The buyer has committed to a $1 million renovation of the common area amenities, landscaping and a utility sytem over the next two years. Hometown American obtained a new first loan for 50 percent of the purchase price and the city provided 26 percent of the financing in second position. The down payment was 24 percent of the selling price.
Muller Refinances Pinnacle Executive Centre
The Muller Company has completed a $13.5 million refinance of Pinnacle Executive Centre, a 110,110-square-foot Class A office building in San Diego and signed 11 leases and renewals totaling 84,864 square feet valued at $16.9 million. The company, with a financial partner, purchased Pinnacle in May 2007. It is a five-story structure located at 10920 Via Frontera. Tom Mattinson of Quadrant Real Estate Advisors of Alpharetta, Ga., handled the refinance. The new leases and renewals brings Pinnacle Executive Centre’s occupancy to 76 percent. Among them: On Ramp Wireless, a 12,100-square-foot tenant, signed a lease for an additional 7,000 square feet and added six months to its current lease for a total value of $2.2 million. The state Department of General Services signed a nine-year lease for 23,382 square feet valued at nearly $8.4 million. The Muller Company’s leasing team includes Gary Williams of Colliers International and Jay Alexander of Jones Lang LaSalle. Pinnacle’s property manager is Kim Sabre.
San Diego-Area Properties Sold by Hanover Real Estate Partners
Hanover Real Estate Partners, a privately held real estate investment company, has sold four California properties, three of them in San Diego and one in Stockton — all of them vacant. The properties total 300,000 square feet and consist of a 200,000-square-foot, three-story office building at 401 Mile of Cars Way, National City; a 5,100-square-foot retail bank branch at 2751 Via de la Valle, Del Mar; a 6,000-square-foot retail bank branch at 16901 Bernardo Center Drive, Rancho Bernardo; and a seven-story, 89,000-square-foot office building at 6 South El Dorado St., Stockton.
David Howard Named President of Lee & Associates in San Diego
Twenty-five-year commercial real estate veteran David E. Howard has been named president of Lee & Associates’ San Diego North office. Howard is a founding principal of Lee’s national accounts group which represents national office and industrial clients across the country. he joined Lee in 2005. Prior to joining Lee & Associates, Howard was the president and CEO of RESOURCE Commercial Real Estate Inc. (RCRE). The firm specialized in strategic representation to end-users of commercial real estate and buyers and sellers of investment properties. The firm expanded to six offices throughout the Western U.S. under Howard’s direction. Howard has been involved in major real estate activities including the Walnut Creek relocation of Newmeyer & Dillion LLP; the new Orange County office of Collins, Collins, Muir & Stewart LLP; and the relocation of the Discount Dance Supply’s distribution center in Anaheim, along with stores in San Diego, Rancho Cucamonga, Anaheim Hills and Temecula. Howard started his career in commercial real estate as a director of corporate services at Charles Dunn Company in Los Angeles as well as with CBRE as part of the Madison Advisory Group located in Newport Beach. Howard replaces Brad Roppe, who leaves to assume a position outside of the real estate industry.
General Atomics Aeronautical Systems Gets High Ranking
General Atomics Aeronautical Systems Inc. has been ranked as one of the top employers for “Technical Challenge” and “Valuing the Individual” in Aviation Week’s 2010 Workforce Study. The annual study, which represents 78 percent of U.S. aerospace and defense (A&D) workers, takes an industry-wide look at the current state-of-the-A&D workforce, with responses to specific questions resulting in an assessment of how companies are meeting employees’ basic requirements in several key categories. The company tied with another industry leader for third-place in the category of Technological Challenge, which assesses a company’s ability to challenge its employees with technological innovation and to provide an environment that supports technological accomplishment. The company also tied with two other companies for third-place in the category of Valuing the Individual, which evaluates the ability to make individuals feel valued by providing opportunities for them to contribute to the organization’s efforts and by showing them respect within the organization.
New Leases Bring Sandrock Park to Full Occupancy
Reputation Impressions LLC and Coast 2 Coast Financial have signed a three-year, $225,000 lease for 10,000 square feet of shared office space at Sandrock Park, 8589 Aero Drive in Kearny Mesa. The transaction brings Sandrock, a four-building, 103,096-square-foot office/industrial park, to 100 percent leased. Other tenants in the project include South Sun Beads, AllianceOne and Gamma Scientific. Reputation Impression, a call center focused on hotel reviews and ratings, and Coast 2 Coast Financial, a financial company that provides a variety of services, will share the space for their respective businesses. Westcore Properties was represented by Matt Pourcho & Brent Wright of CB Richard Ellis in the transaction. The lessee represented itself.
Upcoming SCORE San Diego Workshops:
• Aug. 20 – Financing Your Business – Carlsbad – 9:30 a.m. to noon at National University in Carlsbad (705 Palomar Airport Road, Carlsbad 92011; pre-paid registration $29, $39 at the door).
• Aug. 21 – Costing, Pricing, Break-Even Analysis – 9 a.m. to 12:30 p.m. at Point Loma Nazarene University in Mission Valley (4007 Camino del Rio South, San Diego 92108; pre-paid registration $49, $59 at the door).
• Aug. 23 – Financial Statements – 9:30 to 11:30 a.m. at SCORE Entrepreneur Center (550 West C St., #550, San Diego 92101; pre-paid registration $29, $39 at the door).
• Aug. 24 – Internet Marketing 303: Social Media – 9 a.m. to noon at Point Loma Nazarene University in Mission Valley (4007 Camino del Rio South, San Diego 92108; pre-paid registration $49, $59 at the door).
The Daily Business Report is produced by REP Publishing Inc., publisher of San Diego Metropolitan Magazine, the North Park News, Kensington News and the West Coast Craftsman. (619) 906-4104.