Sterling Heights: 58-unit multifamily sample, San Diego

## Rent Position & Loss-to-Lease The rent roll shows $1,312,692 in total annual in-place gross potential rent across 58 units, with a mean monthly rent of $1,886 and a median of $1,895 — the tight clustering suggests a relatively homogeneous unit mix at the core, though the $1,379–$3,868 monthly range indicates outliers on both ends. The $191,052 annual loss-to-lease (12.71% of market) is the dominant underwriting variable: it represents real upside if turnover can be achieved, but in a 1920-vintage San Diego asset, California AB 1482 and any applicable local rent ordinance will cap annual increases on tenants in place, making organic burn-down of that gap slow and uncertain. ## Occupancy & Rollover Data Quality The rent roll reflects 100% physical occupancy (58 of 58 units marked occupied), which is a positive headline but removes any near-term natural turnover catalyst for capturing loss-to-lease. More concerning is the lease rollover data: every bucket — 0–3 months, 4–6 months, 7–12 months, 13+ months, and expired — shows zero leases. This is almost certainly a data artifact rather than a reflection of reality. Underwriters should obtain original lease documents and reconstruct expiration dates independently before closing; the absence of rollover data makes it impossible to model re-leasing velocity or near-term revenue upside with any precision. ## Vintage & Physical Risk At 104 years old (built 1920), Sterling Heights is among the oldest multifamily stock in any San Diego submarket. This vintage is consistent with elevated capex requirements — plumbing, electrical, seismic, and envelope systems are all candidates for near-term capital spend. The IC should require a full PCA with a 12-year capital reserve schedule before approving a budget. The age also confirms the asset falls within California's AB 1482 rent-control framework (buildings must be 15+ years old), further constraining the pace at which the $15,921 monthly loss-to-lease can be recovered through re-leasing. ## Underwriting Flags for IC Three items require resolution prior to credit approval: (1) independent verification of all lease expiration dates given the zero-rollover anomaly in the data; (2) confirmation of any banked rent increases — the rent roll includes `banked_pct` and `banked_monthly` fields, and the magnitude of banked amounts should be reviewed unit-by-unit for units where in-place rent is materially below the $1,886 mean; and (3) a unit-level review of the $1,379 floor-rent unit(s) to determine whether below-market rents reflect non-arms-length tenancies, long-term legacy leases, or unit condition issues that would require capital to cure before re-leasing at market.