4438 56th Street

Arby Eivazian of ACI takes a look back at his sale of 4438 56th Street in the College Area neighborhood of San Diego.

For ACI’s 35th Anniversary, we continue our look at some of the favorite transactions of current brokers and agents. After flashing back to the early 1990’s to cover a transaction by Dave Savage, it only seems fair to jump forward and cover a sale by one of his team.


A Unique Opportunity

4438 56th Street is a perfect example of the opportunities that abound in the College Area of San Diego. This 15-unit complex, located just south of El Cajon Blvd, was perfectly designed to be a value add property for any savvy investor. At the time of sale in 2015, buying agent Arby Eivazian has been with ACI for a little over a year working under Dave Savage. He was immediately struck by the interior design of the building.

“Most properties have a mix of 1 bedroom and 2 bedroom units and generally lack central air conditioning” he explains, “the property on 56th offered a wonderfully unexpected combination of all 2 bedroom and two bathroom spaces, all delightfully with central air as a default feature”. The uniqueness of this asset helped Arby secure a purchase of the property for his client at $2,625,000.


A Client Re-positioned for Success

Located just to the south of San Diego State University, 4438 56th Street has direct access to El Cajon Blvd to the north, allowing for short driving and pedestrian travel for residents working or attending at the university. According to the properties press release, at time of sale the location has a Gross rent multiplier (GRM) of 11.4 and a Capitalization rate (Cap Rate) of 4.9%. The buyer, Esther Daniels had previously worked with Arby on a past transaction. Arby later admitted that he chose this particular transaction because of the effect if had on Esther’s investment portfolio.

“My client went from owning 7 units to a solid 15 overnight, she was exhilarated at the prospect of moving up in cash flow and just the sheer size of a 10+ unit asset” Eivazian enthusiastically proclaimed. One way in which cash flow was optimized in advance of the sale was with the help of the owner at the time. “The owner, with the help of [his] management company renovated many of the units allowing Esther to increase her cash flow.

At the time, the property rents were considered low for the area at around $1260 per unit. According to data collected by San Diego Apartments, rent for the same unit type just a year later clocked in at over $2,219. Extensive renovations to the property at time of sale would inevitably help Esther optimize her investment.