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-   -   SAN DIEGO | Boom Rundown, Vol. 2 (https://skyscraperpage.com/forum/showthread.php?t=126473)

Streamliner Feb 18, 2022 12:05 AM

Quote:

Originally Posted by LAisthePlace (Post 9540800)
"Downtown is currently home to 12.7 million square feet of office space, although nearly 22 percent of all inventory is vacant, according to the most recent industry data from JLL’s research arm. With another 1.6 million square feet of downtown office space under construction, West will compete head-to-head for office tenants in a market that’s soon to be overflowing with space. Located alongside downtown’s C Street, West offers direct trolley access — although its proximity to a troubled transit corridor could also be seen as a deterrent."

Seems like a good development, but I had no idea Downtown San Diego's commercial vacancy rate was that high. Great to see builders adding to the commercial stock even with the high vacancy, but confused by the last sentence.

What about the trolley access / transit corridor makes it "troubled"?

I think it's that particular transit corridor (C Street) that is considered troubled. C Street is not exactly a nice place to hang out. Lots of homeless, not much quality retail, etc. One would pass through it if needed, but generally wouldn't want to be hanging out there.

As for the high vacancy, I'm not really aware of vacancy rates, but perhaps it's due to COVID? Maybe someone else can chime in.

Andy-4-SD Feb 18, 2022 12:55 AM

Quote:

Originally Posted by Streamliner (Post 9540852)
I think it's that particular transit corridor (C Street) that is considered troubled. C Street is not exactly a nice place to hang out. Lots of homeless, not much quality retail, etc. One would pass through it if needed, but generally wouldn't want to be hanging out there.

As for the high vacancy, I'm not really aware of vacancy rates, but perhaps it's due to COVID? Maybe someone else can chime in.

Vacancy rates in Downtown have lagged behind other employment centers, particularly La Jolla/UTC and Sorrento Valley, for years. Hard to find office space in those areas, and the vacant space that is available is being turned to biotech and tech office.

Even before Covid, Downtown regularly hovered around 15-20%. With that said, it is typical for office space to have a higher vacancy than other product types such as apartments.

I think the issue with downtown is that a lot of the office space is older inventory - Core Columbia is mostly 70s and 80s build class B office. Tenants today want class A. These new developments, particularly Horton Plaza and IQHQ could likely well turn out to be a catalyst. UTC and Sorrento valley are both pretty much built out, leaving downtown as the most sensible place to build office. A lot of younger work talent prefers to live downtown, so it makes sense for companies to leverage that to attract more talent.

IrvineNative Feb 18, 2022 1:12 AM

^^^ No matter how much I want Downtown San Diego to be a huge corporate center like Downtown Seattle, I don't think it'll happen when big corporate HQs are leaving, not moving into, California and thus office space demand will be lower. The fact that San Diego is building as much office space as it is right now is pretty incredible given San Diego's weak corporate economy relative to other metros of its size. Imagine if we got a lot of corporate relocations like Austin did, though, and we didn't have airport near downtown. We could be getting multiple 500+ feet, all office, skyscrapers.

I also have a hunch that the downtown 500 foot height limit is why we have a lot of parking craters. Sure you could, given tons of money, build a bunch of 400' towers. But to developers, it's going to require a lot less steel and concrete to house 2 million square feet of office in one 900' tower vs in three 400' towers, which is so expensive that developers might as well build all that 2 million sq ft as sprawling office park in Sorrento Valley.

JSW Feb 18, 2022 5:39 PM

Quote:

Originally Posted by LAisthePlace (Post 9540800)
[B]What about the trolley access / transit corridor makes it "troubled"?

It's just a fairly run down and neglected corridor in downtown SD and has several delapidated / boarded up buildings and the problems you'd expect to come along with that. There are a few rough trolly stops. Compared to other cities, no it's not "troubled" but compared to the rest of downtown, it stands out.

There is a revitalization plan pre-covid, but who knows what will happen now. The abandoned California Theatre is probably one of the biggest eyesore and squatter issues, so if that condo development would actually move forward it would make a big difference IMO.

IrvineNative Mar 1, 2022 4:06 AM

Anyone got updates on NAVWAR and Tailgate Park?

NAVWAR is in Midway but if I understand correctly it is exempt from the 30 foot height limit as it is considered federal, not municipal, land.

Tailgate Park, anyone know what's going on? Supposedly the deadlines for negotiations between the Padres and the City was supposed to be 1/31, which has come and passed, but no news. So it's back to square one?

I was so excited for Tailgate Park, because it was mostly biotech office space. That's the one office space market that has not only not suffered but thrived during the pandemic. I don't want Downtown to simply become a sea of condos inhabited by remote workers and retirees who won't contribute to transit ridership. For transit ridership to grow, you need office TOD because everyone at an office has to commute, and a million sq ft office space can hold far more people than a million sq ft apartment space.

ucsbgaucho Mar 1, 2022 4:44 PM

https://www.sandiegouniontribune.com...size-and-price

Tuesday, the Port of San Diego released the Seaport San Diego project description, a 167-page document with development specifics and narrative descriptions for each of the project’s seven land blocks and five water zones. The document, which is more than five years in the making, will go before port commissioners at the March 8 board meeting where they’ll get to weigh in on — but not approve — the latest iteration of the mega project that promises to substantially alter the city’s front porch.

Over the years, the redevelopment effort has swelled in size and now includes 105 acres of land and water area — and 2.7 million square feet of mixed-use development — in and around San Diego Bay. It’s also ballooned in price, adding billions to the bottom line with each iteration presented to the port.

https://awesomescreenshot.s3.amazona...4b4c0daa7431a5

IrvineNative Mar 1, 2022 7:51 PM

Quote:

Originally Posted by ucsbgaucho (Post 9552765)

Tuesday, the Port of San Diego released the Seaport San Diego project description, a 167-page document with development specifics and narrative descriptions for each of the project’s seven land blocks and five water zones. The document, which is more than five years in the making, will go before port commissioners at the March 8 board meeting where they’ll get to weigh in on — but not approve — the latest iteration of the mega project that promises to substantially alter the city’s front porch.

Over the years, the redevelopment effort has swelled in size and now includes 105 acres of land and water area — and 2.7 million square feet of mixed-use development — in and around San Diego Bay. It’s also ballooned in price, adding billions to the bottom line with each iteration presented to the port.

Can't believe after San Diego's tourism-heavy economy was hammered by COVID that Seaport will become another mega resort, as if there wasn't another mega resort (Gaylord Pacific) in the works nearby.

So much for Downtown San Diego becoming a corporate tech center like Downtown Austin which is getting new office skyscrapers even during COVID. Downtown Austin is actually going to get a ton of workers commuting on their Project Connect LRT to Downtown. The SD Trolley? Haha, try convincing tourists to wait up to 15 minutes for a trolley from the airport to get to Seaport and the Convention Center, which are only 12 minutes away from the airport by Uber.

eburress Mar 1, 2022 8:03 PM

That's a good point about the risk of doubling down on tourism but to expect Austin-like results in San Diego, when all those new Austin buildings are being filled with companies and people *leaving* California, doesn't seem realistic either.

SAN Man Mar 1, 2022 10:36 PM

Quote:

Originally Posted by IrvineNative (Post 9553026)
Can't believe after San Diego's tourism-heavy economy was hammered by COVID that Seaport will become another mega resort, as if there wasn't another mega resort (Gaylord Pacific) in the works nearby.

So much for Downtown San Diego becoming a corporate tech center like Downtown Austin which is getting new office skyscrapers even during COVID. Downtown Austin is actually going to get a ton of workers commuting on their Project Connect LRT to Downtown. The SD Trolley? Haha, try convincing tourists to wait up to 15 minutes for a trolley from the airport to get to Seaport and the Convention Center, which are only 12 minutes away from the airport by Uber.

RaDD is developing lab space in downtown, right? Plus Horton Plaza's new research campus in place of a suburban style retail center full of chains that have been in decline from online competitors like Amazon.

https://iqhqreit.com/project/radd/
https://hortonsd.com/campus

Streamliner Mar 1, 2022 11:07 PM

Quote:

Originally Posted by SAN Man (Post 9553244)
RaDD is developing lab space in downtown, right? Plus Horton Plaza's new research campus in place of a suburban style retail center full of chains that have been in decline from online competitors like Amazon.

https://iqhqreit.com/project/radd/
https://hortonsd.com/campus

Correct, RaDD will have biotech space just across the street from Seaport Village.

And for what it's worth, the new Seaport Village will set aside 308k SF of space for "blue tech" or ocean research-related enterprises. Which is a lot more than I would have expected for a project that at its core is replacing a tourist development with a tourist development.

Andy-4-SD Mar 1, 2022 11:19 PM

Quote:

Originally Posted by eburress (Post 9553044)
That's a good point about the risk of doubling down on tourism but to expect Austin-like results in San Diego, when all those new Austin buildings are being filled with companies and people *leaving* California, doesn't seem realistic either.

Agreed. Austin also doesn't have the inherent tourism demand that San Diego has. Doesn't have the same waterfront or the weather. This is the best location in the city to create an iconic world-class destination. It should be a landmark, not an office park. Downtown needs a beach. Downtown needs a main attraction aside from Petco park. Most of downtown is just restaurants and apartments. This development is truely a game changer. Moreso, this development will be a catalyst for further growth and development downtown.

They're building $2b of office within a few blocks with horton plaza and IQHQ Development. Reminder - this is in downtown, which is a largely untested market for class-A tech office. I think these projects will prove to be successes but they together will saturate the market for some time. Additionally, with the new crackdown on Airbnbs, there's going to be demand for 4,000-5,000 more hotel rooms inn SD. Hotel rooms in this location will have high occupancy and do great.

SDfan Mar 2, 2022 12:02 AM

Just a quick reminder that you can't build homes or offices on tidelands, which is where Seaport Village is located. Those are under the perview of the coastal commission, and they only permit public access, amenities, tourism and recreational development on tidelands.

Gafcon is trying to sell their 300k office component as "bluetech" which is a stretch that I'm not sure the CC is going to buy.

Also, I wouldn't be building anything along the coast anways. The sea and groundwater level rise in these areas is going to be...well, not good in the coming decades (something Gafcon is also trying to address, the entire ground floor component could be converted to canals from what I understand).

SDfan Mar 2, 2022 12:10 AM

Also downtown is bloating with speculative office development. IQHQ. Hortan Plaza. BoA annex. Padres. I could go on. Downtown doesn't need any more office proposals, unless they're actually going to prelease, which from what I hear, is not going well. Expect double digit vancancy rates for some time.

Meanwhile, national and international bio and tech real estate firms are snapping up property in Sorrento Mesa and Sorrento Valley and aiming to redevelop low slung industrial campuses into horizontal biotech lab spaces ala Torrey Pines Mesa. They're looking to charge $6sqft which is insane and shows you were the real money in commercial real estate is going to go. That's not even mentioning University City, which is about to blow up after their community plan update adds millions of sqaure feet of new commercial and residential zoning potential. But yes, best of luck to downtown lol

https://www.sandiegouniontribune.com...or-464-million

https://www.sandiegouniontribune.com...orrento-valley

https://www.sandiegouniontribune.com...-mall-near-utc

SAN Man Mar 2, 2022 12:32 AM

Quote:

Originally Posted by SDfan (Post 9553335)
Also downtown is bloating with speculative office development. IQHQ. Hortan Plaza. BoA annex. Padres. I could go on. Downtown doesn't need any more office proposals, unless they're actually going to prelease, which from what I hear, is not going well. Expect double digit vancancy rates for some time.

Meanwhile, national and international bio and tech real estate firms are snapping up property in Sorrento Mesa and Sorrento Valley and aiming to redevelop low slung industrial campuses into horizontal biotech lab spaces ala Torrey Pines Mesa. They're looking to charge $6sqft which is insane and shows you were the real money in commercial real estate is going to go. That's not even mentioning University City, which is about to blow up after their community plan update adds millions of sqaure feet of new commercial and residential zoning potential. But yes, best of luck to downtown lol

https://www.sandiegouniontribune.com...or-464-million

https://www.sandiegouniontribune.com...orrento-valley

https://www.sandiegouniontribune.com...-mall-near-utc

Yep, I'm thinking the same. UTC has been booming and will continue to boom with UCSD growth next by and the trolley is now there to build off of that spine.

eburress Mar 2, 2022 1:15 PM

Quote:

Originally Posted by Andy-4-SD (Post 9553287)
Agreed. Austin also doesn't have the inherent tourism demand that San Diego has. Doesn't have the same waterfront or the weather. This is the best location in the city to create an iconic world-class destination. It should be a landmark, not an office park. Downtown needs a beach. Downtown needs a main attraction aside from Petco park. Most of downtown is just restaurants and apartments. This development is truely a game changer. Moreso, this development will be a catalyst for further growth and development downtown.

They're building $2b of office within a few blocks with horton plaza and IQHQ Development. Reminder - this is in downtown, which is a largely untested market for class-A tech office. I think these projects will prove to be successes but they together will saturate the market for some time. Additionally, with the new crackdown on Airbnbs, there's going to be demand for 4,000-5,000 more hotel rooms inn SD. Hotel rooms in this location will have high occupancy and do great.

That's a really good point too. While it seems like this is SD doubling down on tourism, if there was ANYWHERE in the city to have a visitor-friendly development, this is it. lol

IrvineNative Mar 2, 2022 3:31 PM

Quote:

Originally Posted by SDfan (Post 9553335)

Meanwhile, national and international bio and tech real estate firms are snapping up property in Sorrento Mesa and Sorrento Valley and aiming to redevelop low slung industrial campuses into horizontal biotech lab spaces ala Torrey Pines Mesa. They're looking to charge $6sqft which is insane and shows you were the real money in commercial real estate is going to go. That's not even mentioning University City, which is about to blow up after their community plan update adds millions of sqaure feet of new commercial and residential zoning potential. But yes, best of luck to downtown lol

So I guess SD is just going to continue to sprawl into Sorrento Valley office parks? Doesn't seem good. We need to channel that office space demand away from Sorrento Valley into dense corridors in University City, Mission Valley, and Downtown, close to the trolley.

IrvineNative Mar 2, 2022 4:24 PM

Quote:

Originally Posted by eburress (Post 9553044)
That's a good point about the risk of doubling down on tourism but to expect Austin-like results in San Diego, when all those new Austin buildings are being filled with companies and people *leaving* California, doesn't seem realistic either.

Which is the point. It's easy to scapegoat NIMBYs for lack of density, and NIMBYs aren't good, but the far bigger barrier to more density is simply having a slow population growth rate regionally and not having big corporations relocating to Downtown and other dense hubs.

You can be YIMBY all you want but if you continue to have high taxes and high regs people will continue to move away.

YIMBYism accelerates smart growth once there is demand, but it does not by itself create demand and by itself is limited in kindling growth.

So yeah, ironically Austin will end up more urban than San Diego despite Texas' state government making California's look super transit-oriented and pro-density. Because when you're growing fast, even if a small share of that growth is TOD, that's still a lot of TOD. Also a reminder that Austin is also a very NIMBY city.

JerellO Mar 3, 2022 6:32 AM

California needs to stop taxing everything so much. It’s what’s causing business and residents to leave to places that are much more business friendly and have lower taxes such as Texas and Florida

SAN Man Mar 3, 2022 3:06 PM

Quote:

Originally Posted by JerellO (Post 9555127)
California needs to stop taxing everything so much. It’s what’s causing business and residents to leave to places that are much more business friendly and have lower taxes such as Texas and Florida

San Diego utility rates are the highest in the nation. That hits energy intensive industries and business really hard too. Somebody was telling me that SDG&E's super-off peak hours are higher than most cities' peak hours.

homebucket Mar 3, 2022 6:24 PM

If you look at SD's main industries they're not traditionally in urban highrise office settings. Military/defense, education, healthcare, tourism, trade. Even life sciences office space are typically in sprawling, horizontally oriented suburban campuses.


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