Annual Rent Growth Surges in Areas Closest to Trolley Stops But Lags Downtown
San Diego's Mission Valley Transit-Oriented Communities Look Forward to Trolley Extension
With the Blue Line trolley extension in actively underway, Mission Valley will soon have a direct link to the job hub in UTC via Old Town. Nine trolley stops spread across Mission Valley, with three more planned along the Moreno Corridor, in conjunction with the expansion.
But how do apartment communities within close proximity to trolley stations stack up with the balance of the area? Pretty well, actually. At the end of the third quarter, Mission Valley’s apartments located within a five-minute walk of a stop achieved not only the highest rents in Mission Valley, but also the strongest annual rent growth. Rents averaged $2,350 per month while rents grew 7.5 percent over the past 12 months.
For comparison, those communities within a 10-minute walk to a trolley stop in Mission Valley averaged $2,250 per month at the end of the third quarter. Rents grew at a 4.75 percent clip over the trailing 12 months. And in the entire Mission Valley area, rents ended the third quarter of 2018 averaging $2,035 per month. Annual rent growth clocked in at 4.1 percent, right in line with San Diego’s overall average.
Downtown San Diego will also have a direct link to UTC with the trolley expansion. Communities within a five-minute walk to one of downtown’s stops averaged $2,481 per month in rent. Even so, rent growth largely dried up in the past year and ended the third quarter down 0.4 percent.
The communities within a 10-minute walk fared a bit better in the past year. Rent growth notched a 0.3 percent gain while communities averaged $2,431 per month in rent.
And while both Mission Valley and downtown have led San Diego in terms of new inventory since 2015 with 2,500 and 3,300 new units respectively, downtown’s under-construction inventory accounts for 40 percent of the county’s under-construction supply, putting the brakes on rent growth as an unfettered wave of units pours into downtown San Diego.
Landlords, however, expect that the trolley expansion will be a boon to their communities once it wraps up in 2021. And with its central location in Mission Valley and nearly unparalleled amenities downtown, both areas expect demand to only increase after completion.