Chicago company buys Vista apartments for $185M in one of the year’s biggest sales

A Chicago investment firm has bought a Vista apartment complex for $185 million in the second-largest deal of the year in the county.

Mesirow Financial, a privately held financial services outfit, paid $451,220 per unit for the Preserve at Melrose Apartments — a deal real estate tracker CoStar said shows San Diego County’s appeal to out-of-state investors.

Since 2023, San Diego County has had an outsized number of big apartment sales, CoStar said, accounting for 10% of all U.S. multifamily transactions of more than $150 million. The biggest sale this year was the $210 million October purchase of The Avalyn at Millenia in Chula Vista by New York-based private equity giant Blackstone.

Joshua Ohl, CoStar director of market analytics, said investment firms see right now as a time to pounce because rents are essentially flat. He said that keeps purchase prices potentially lower for the moment before rents, inevitably, rise again.

“They are getting in at a good time for the market,” Ohl said. “There’s a little less rent growth, a little less demand. But the long-term demand drivers for housing suggest the mid- and long-term path for San Diego should be pretty sound.”

Average rent in the third quarter for San Diego County was $2,498 a month, a measly 0.3% gain in a year. The 410-unit Preserve at Melrose Apartments should give Mesirow Financial a slightly better return because it has a $2,955 average monthly rent.

Alasdair Cripps, CEO of Mesirow’s real estate division, said in a statement that Preserve’s amenities made it stand out.

“The Preserve’s expansive amenity set, transit-oriented location and proximity to key employment centers,” he wrote, “make it one of north county San Diego’s most attractive multifamily properties, and we look forward to serving this community.”

The complex has a pool, sundeck, gym, clubhouse, large courtyard and a playground. Its location, at 1401 N. Melrose Drive, is across the street from the Melrose Drive Train Station with access to the Sprinter rail line. Built in 2015, the Preserve was purchased by San Diego-based MG Properties in June 2017 for $134 million, making its recent sale a 38% increase in property value.

Ohl said San Diego County’s sluggish homebuilding for decades may appeal to investors who see little danger of the multifamily market getting overbuilt.

Mesirow Financial might have a foothold in San Diego County now, but it is a minor player with its 410 apartments. The county’s largest landlord, San Diego-based R&V Management Corp., has 11,079 units. Blackstone, following its October purchase in Chula Vista, is now the county’s second-largest landlord with 7,195 units.

San Diego County’s uptick in apartment sales still doesn’t compare with 2021 when investors went bonkers with apartment purchases. As of December, there have been about $2.5 billion in sales in San Diego County in 2024. That compares with $2.2 billion in 2023, $3.9 billion in 2022 and $5.7 billion in 2021, which was the county’s biggest ever sales year.