South Bay Market Pulse: Q4 2024

The National City multifamily market continues to show resilience in Q4 2024, with family-owned portfolios benefiting from strong fundamentals and strategic positioning.

Market Overview

National City's multifamily sector has demonstrated remarkable stability, with occupancy rates holding steady at 96-98% across well-maintained properties. The submarkets along Highland Avenue and Plaza Boulevard continue to attract quality tenants, driven by proximity to employment centers and transit corridors.

Cap Rate Trends

Cap rates in South San Diego County have compressed slightly to the 4.5-5.5% range for Class B multifamily assets, reflecting strong investor demand and limited inventory. Family-owned portfolios with deferred maintenance may see higher cap rates (5.5-6.5%), presenting value-add opportunities.

Rental Rate Performance

Average rents for 2-bedroom units in National City have increased 3.2% year-over-year, now ranging from $1,800 to $2,200 depending on unit quality and location. Properties with recent upgrades command premium rents.

Investment Outlook

For Sellers: This remains a strong seller's market for well-maintained multifamily assets. Owners considering succession planning or tax-deferred exchanges should evaluate opportunities now.

For Buyers: Limited inventory continues to drive competition. Off-market opportunities and value-add plays offer the best risk-adjusted returns for patient capital.

Key Takeaway

Family-owned portfolios should focus on strategic asset positioning—whether through optimization and hold, or strategic disposition and 1031 exchange into passive income alternatives like DSTs.

For a confidential portfolio review and market analysis specific to your assets, reach out for a conversation.