Daily Business Report — May 10, 2011
What’s Desireable in High-Priced Homes?
By Zach Todaro
In real estate, everyone is concerned with the biggest sales. Especially in San Diego, this infatuation usually means multimillion dollar transactions, canyon views, thousands of square feet of both indoor and outdoor living space, and high end finishes. On the business end, these large transactions result in not only larger commissions paid, but also increased risk, expanded legal ramifications, intricate negotiations and more robust contingencies. Is there something beyond the public’s love of volatility, of high-risk reward scenarios, that drives this obsession? Underneath the purported glamour of the big sale is vital information for both buyers and sellers of average valued property. Most high-end properties contain a multitude of factors that add implied value. The main factors are location, build quality, finish quality, view and outdoor space. While a high-end home may review well with regard to all six categories, median priced homes traditionally are viewed favorably in three such categories, and lower priced homes may only fulfill two favorable categories. Take a look at the highest sales in 2010 and see which desirability factors are seen in the highest priced current listings. Then we’ll pinpoint which factors buyers and sellers in the median home value range should weigh favorably when considering a sale or purchase.
4226 Middlesex Drive was the highest sale in Kensington in 2010, ringing in at $1.175 million. The recently renovated Spanish home has three bedrooms, four baths, 2,000 square feet of indoor space and 9,016 square feet of lot. The exterior of the home offers up the first clue on value… Spanish-styled haciendas with tile roofs and white adobe-styled stucco are very popular in the region. The main indicator of value for this specific property is the outdoor space; perched atop a canyon, the view extends north towards Mission Valley. A well situated pool, hottub and barbeque take full advantage of the lot orientation.
5374 Canterbury Drive is the highest current listing in Kensington, with an asking price of $1.179 million. Unlike the Spanish previously mentioned, this property is a traditional California ranch style, with a clean and simple interior layout that could lend well to mid-century modern décor. The lot layout is the opposite of the previous property; the pool and patio living space are located near the street, while the home (three-bed, four-bath, 2,100 square feet) is located in the rear, taking advantage of breathtaking canyon edge views.
In this short study of Kensington properties, it is fairly clear what buyers at the high end of the market value. An outdoor terrace/living space in correlation with a canyon view is paramount. The style of home comes secondary, although both properties contain a modern, renovated interior layout. Buyers of median priced property in Kensington should keep a lookout for options that provide unfinished outdoor space adjacent to any kind of view. This can be landscaped later to build equity, or marketed as a blank canvas in a future sale. If you don’t need a pool, that’s fine, just be sure the next owner has enough room to install one. Likewise potential sellers in this market should trim vegetation to frame any potential vistas. $300 in landscape maintenance could mean $15,000-$20,000 in additional resale value, in addition to a leg up on similarly priced property.
3117 28th Street was the highest sale in North Park in 2010, at $1.125 million. The Spanish Renaissance home (three-bed, four-bath 2,344 square feet) looking over Morley Field holds many similarities to the highest sale in Kensington; a classically constructed exterior, modern interior layout, quality finishes that don’t detract from the historical qualities of the home, and well maintained patio/exterior space. This specific property is Mills Act designated (deemed historically significant), which certainly contributed to the sales price. Owners of Mills Act designated properties often see a 40 percent to 60 percent reduction in their property tax bill as a benefit of participating in the program.
The highest active listing in North Park is 3593 Pershing Ave., currently at $795,000. The five-bedroom, three-bathroom home, with 2,208 square feet of living space, is of the prevalent North Park Arts & Crafts style, and includes a two-car garage. While the interior is reflective of the home’s 1924 original construction, the rooms are well proportioned and lend well to a modern furniture arrangement. The property is marketed as having Mills Act potential, no doubt something a potential buyer should take the time to research.
Marketing to Investors Abroad
The San Diego chapter of the National Investor Relations Institute (NIRI San Diego) will focus on “Marketing to Investors Abroad” at its May 19 meeting at the offices of Websense, 10240 Sorrento Valley Road, in San Diego. A reception is at 5 p.m. followed by presentations from 5:30 to 8 p.m. The event will address a number of issues, including the benefits of marketing to investors outside of the United States, what companies are successfully doing so, the key investors in U.S. equities in Europe and Asia, the best practices and pitfalls, among others. Speakers include Jennifer Bishko, director of corporate marketing for Deutsche Bank, and Lance Spacek, managing director and global head of corporate marketing at Deutsche Bank, as well as a local investor relations officer. The cost is $50 for NIRI members and $65 for nonmembers. Register by e-mail at firstname.lastname@example.org.
Physicians Medical Center Wins Award
Physicians Medical Center of San Diego has won “The Outstanding Building of the Year” (TOBY) in the Medical Office category for the Pacific Southwest Region presented by the Building Owners & Managers Association. The center includes two medical buildings and a seven-level parking structure at 7910 Frost St. in Kearny Mesa. It was developed and is managed by Cambridge Healthcare Properties and owned by Rady Children’s Hospital-San Diego. It is home to a variety of medical specialties and complementary services. Physicians Medical Center advances to the international TOBY competition. Winners will be announced in Washington, D.C., in June.
San Diego Music Thing Accepting Artist Submissions
The San Diego Music Thing — formerly known as the North Park Music Thing — is accepting artist submissions for its Sept. 9-10 music conference at the Lafayette Hotel in North Park. The fourth annual event offers attendees an opportunity to improve their knowledge of the music business through interactive and roundtable sessions with nationally-known panelists and featured speakers as well as an evening Music Festival component, with over 100 local, regional and national bands performing at 15 venues around San Diego. The San Diego Music Foundation sponsors the event. It also organizes the San Diego Music Awards show that recognizes artists of exceptional merit in the community. Panel topics for this year’s conference include Music industry 101: The Basics 2011; How To Develop a Coordinated Social Media Plan Without Spending a Bundle; Music DIY — Is it realistic?; Do bands in 2011 really need a full time manager?; No matter what you do, it’s all about the song; and Licensing Your Music: Can a band make money from TV, movies and video games? Musicians can apply at sonicbids.com/sandiegomusicthing.
Brittain Cheney Joins Cushman & Wakefield
Industry veteran Brittain Cheney has joined Cushman & Wakefield as senior director and in charge of office and corporate headquarters leasing in North County. Cheney previously was vice president of leasing for the Irvine Co. He has more than 13 years of experience in commercial real estate. Cheney spent a year with Equity Office Properties as managing director of leasing for the Silicon Valley area. Before that he was a broker with CPS/Commercial Property Services.
The 2011 40 Under 40 Awards nomination period is in full swing. May 30 is the deadline for submitting nominations of people you believe are making substantial contributions to their community, their companies, organizations or institutions. You will find a nomination form on the front page of our Website (sandiegometro.com). Fill it out and submit. Editor’s Tip: Describe your nominee in depth. Give plenty of examples of major accomplishments.
SCORE San Diego continues its series of low-cost workshops. Fees range from $29 to $109, depending on the program. To register online, visit score-sandiego.org. For more information, call (619) 557-7272.
May 12 – Financing Your Business – 9:30 a.m. to noon at National University in Kearny Mesa (9388 Lightwave Ave., San Diego 92123; pre-paid registration $29, $39 at the door).
May 13 – Women’s Networking Breakfast & Exhibits – 8 to 11 a.m. at Morgan Run Resort & Club (5690 Cancha de Golf, Rancho Santa Fe 92091; Attendees: $30 pre-paid registration by May 10, $40 thereafter; Exhibitors: $80 pre-paid registration by May 10, $90 thereafter).
May 14 – Business Plan 201: How to Write a Winning Business Plan – 9 a.m. to 3:30 p.m. at National University in Carlsbad (705 Palomar Airport Road, San Diego 92011; pre-paid registration $99, $109 at the door).
May 14 – Professional Selling: Increase Your Business Sales Now! – 9 a.m. to 4 p.m. at National University in Kearny Mesa (9388 Lightwave Ave., San Diego 92123; pre-paid registration $69, $79 at the door).
May 16 – Business Basics 101 – 9:30 to 11:30 a.m. at National University in Kearny Mesa (9388 Lightwave Ave., San Diego 92123; No charge – please pre-register).
May 17 – Financial Statements: What They Mean, How to Use Them – 9:30 to 11:30 a.m. at National University in Kearny Mesa (9388 Lightwave Ave., San Diego 92123; pre-paid registration $29, $39 at the door).
May 18 – Internet Marketing 301: Increase Sales Through Pay-Per-Click – 9 a.m. to noon at National University in Kearny Mesa (9388 Lightwave Ave., San Diego 92123; pre-paid registration $49, $59 at the door).
May 21 – Introduction to Starting Your Own Business – 9 a.m. to 4:15 p.m. at National University in Kearny Mesa (9388 Lightwave Ave., San Diego 92123; pre-paid registration $69, $79 at the door).
May 21 – Internet Marketing 101: Use the Internet to Successfully Market Your Business – 9 a.m. to 3 p.m. at National University in Kearny Mesa (9388 Lightwave Ave., San Diego 92123; pre-paid registration $69, $79 at the door).
The Daily Business Report is produced by REP Publishing Inc., publisher of SD METRO, the North Park News, Kensington News and the West Coast Craftsman. Contact: Manny Cruz (619) 287-1865.