A 420-unit luxury apartment community built on the site of a decades-old Escondido hospital has changed hands for $180.5 million. Greystar sold The Grand at Palomar Heights to investment firm Mesirow, which financed the purchase in part with a $112 million loan from AIG.
The sale price was reported by Multifamily Housing News, which cited Yardi Matrix data putting the figure at $180.5 million even as the outlet's own headline rounded the deal to $181 million. The Grand sits at 101 Chamomile Glen in downtown Escondido, about two miles from the interchange of Interstate 15 and Ronald Packard Parkway, and it's within walking distance of the Escondido Village Shopping Center, which opened in 1964 as the Golden State's first fully air-conditioned mall.
The property debuted in 2025 after the redevelopment of what the report describes as a nearly 70-year-old hospital in downtown Escondido, with that broader hospital repositioning still ongoing. Before taking its current name, the community was known as Marlowe Palomar Heights — Greystar's first Marlowe-branded project in California. Greystar's own announcement in September 2024 said the community was then leasing, with move-ins slated for that fall.
Inside the 420-Unit Community
The Grand offers one- to three-bedroom layouts spread across apartments and townhomes, with floorplans ranging from 628 to 2,003 square feet. Amenities include a gym, swimming pool, clubroom and coworking spaces, according to the same report.
Hallmark Communities served as general contractor on the project, the outlet reported, rounding out a team that delivered the community on a redevelopment site with a complicated backstory tied to the former hospital campus.
Downtown Escondido Wakes Back Up
The sale lands amid what Multifamily Housing News describes as a submarket stirring back to life. Following an investment peak in 2021 and 2022, the downtown Escondido submarket had been mostly dormant until this year, the outlet reported, with three other deals closing within three miles of The Grand in 2026 alone.
Among those nearby trades: the 326-unit age-restricted Hendrix sold for $94.7 million, and the 225-unit senior housing community Hadley traded for $67.8 million. Those two properties were previously part of a different transaction — MG Properties sold a combined 551-unit portfolio of age-restricted affordable housing, including the Hendrix and Hadley apartments, for $162.5 million to a public-private venture led by Eagle Partners, per a separate Multifamily Housing News report.
More senior housing is on the way near The Grand. A joint venture that includes Mirka Investments plans to build a 90-unit senior housing property across the street, with construction slated to begin in February 2027. A staff report from the California tax credit allocation committee pegs that project's cost at $43.6 million.
A Broader San Diego Rebound
The Grand's sale arrives as San Diego's multifamily investment market shows signs of life more broadly. The region recorded $5.5 billion in sales over the 12 months ending in September 2026, according to a Matthews report cited in the Multifamily Housing News piece, an increase the same report put at 68 percent over the prior comparable period.
Still, pricing per unit has softened even as deal volume climbs. San Diego's average multifamily sale price fell to $271,747 per unit in the third quarter of 2026, down 18.9 percent from $335,218 a year earlier, according to Kidder Mathews research. Vacancy, meanwhile, tightened to 5.0 percent in the third quarter, down from 5.5 percent the prior quarter and 5.3 percent a year earlier, while the average cap rate was 4.9 percent, up from 4.8 percent in the second quarter.
Other recent San Diego-area trades reflect that same softer per-unit pricing environment. Gema, a 230-unit property in Cortez, sold for $80 million, or $347,826 per unit, with GL Capital Partners buying, while Sunterra Apartments, a 240-unit property in Mira Costa, sold for $77.5 million, or $322,917 per unit, to Post Investment Group, per the same Kidder Mathews data.
Mesirow's Growing Housing Portfolio
For Mesirow, the Escondido purchase fits a pattern of expansion. The firm closed its fifth Financial Real Estate Value Fund at $1.2 billion in 2025, a 66 percent increase over its previous investment vehicle, and had acquired 27,400 units across 90 investments as of October 2026, according to the company's website as cited in the report.
