This article was originally posted by Jennifer Chung Klam of San Diego Daily Transcript. The article is an excerpt from the 2016 Top Commercial Real Estate Leaders issue of the San Diego Daily Transcript. Spotlighting professionals from across the county, each interview dove into the history of the professional’s career and offered their take on the future of commercial real estate. Daily Transcript selected Chuck Hoffman of ACI as one of 16 leaders from across the county to be featured on the list. Daily Transcript sat down with Chuck to discuss his outlook of things to come in real estate.
Hoffman co-founded Apartment Consultants Inc. in 1982 and helped it grow into one of San Diego County’s most successful income property brokerage firms. ACI specializes in the sale and acquisition of apartment and investment property throughout the county.
The ACI president said the most satisfying aspect of his work is helping clients build wealth. ACI’s clients include first-time buyers, individuals trading up, armchair investors, banks, and other corporate entities. “I’ve seen remarkable stories from our clients, where they start out with a small amount of money, and over time create incredible wealth for themselves and their children,” he said.
Hoffman has also seen his share of market cycles in the last 34 years, starting with a boom in the 1980s that led to substantial company growth. During the recession of the early 1990s, ACI downsized, maintaining between 10 to 15 agents since. The industry rebounded, only to hit another downturn in the mid-2000s. In recent years, the apartment investment property market has been going strong, with prices at the highest level ever, Hoffman said. The firm has closed an average of more than 140 escrows per year. In the last year, ACI agents have represented more than $178 million in transactions.
The market strength is due to a lack of supply and the high land and construction costs associated with building apartments, Hoffman said. According to a Market Pointe Realty Advisors report released in September, rents on apartments in the county have risen nearly 8 percent since March and vacancy rates have dropped to 2 percent.
While the housing shortage may be good for investors, Hoffman said industry professionals such as himself have long been sounding the alarm on the imminent affordable housing crisis. He has addressed the issue through leadership positions with the Greater San Diego Association of Realtors, California Apartment Association and San Diego County Apartment Association.
“For years, the industry has been trying to inform the electorate, as well as various government agencies, that we’ve got to build more affordable housing,” Hoffman said. “In the last 25 years, there has been this imbalance where the population has grown and the housing stock hasn’t. And the properties being built are high-end projects because the cost of building is over $400,000 per unit, and it won’t pencil with rents needed for affordable housing.” ACI team members have brokered a number of acquisitions for the conversion and development of affordable multifamily buildings.
One recent example was the sale of three land parcels totaling 35,183 square feet for development into a mixed-use building to provide housing for disabled seniors and retail spaces. Hoffman also hopes to have an. impact beyond commercial real estate. For the last three years, he has worked as a court-appointed special advocate for Voices for Children, advocating for the rights and well-being of children who pass through foster care in San Diego.
“I hope I’ve made a difference. I’ve volunteered a lot, sat on a lot of committees and held leadership positions,” Hoffman said. “My goal has always been to give back, not just to the real estate industry but also my community.”