Double Post

Just a few pics from this past weekend -

Remember when you could fit the skyline into one shot? Well, not anymore. I wish I knew how to stitch pics...
http://i4.photobucket.com/albums/y12...s/IMG_8942.jpg

http://i4.photobucket.com/albums/y12...s/IMG_8943.jpg

Now we have to work on filling the gap in between the new Hilton and the Omni
http://i4.photobucket.com/albums/y12...s/IMG_8939.jpg

Hilton Up Close
http://i4.photobucket.com/albums/y12...s/IMG_8940.jpg

Electra tops out
http://i4.photobucket.com/albums/y12...s/IMG_8949.jpg

This has nothing to do with downtown, but while taking these shots I came across this Coronado house that was located a block away from the Bay (without any views). Look at what you get for $1.25 Million !! I only wish the open house was still going on, so I could have walked in and bitch-slapped the seller :haha:
http://i4.photobucket.com/albums/y12...s/IMG_8895.jpg

Filling The Gap
 

:previous: Well Library Tower should be well on its way to filling that gap but the developers wimped out just like the Catellus who should already have had One and Two Santa Fe Place built by now... instead we get a box from Irvine Co. :hell:


My point is that this "lull" in developement doesn't really make sense. I know the condo market is flooded but Lane Field doesn't have condos right, isn't that supposed to be hotels/commercial. And Catellus totally dropped the ball by not building its office towers on spec. They had the money but pussed out.

Watch I bet Irvine won't wait to get 700 Broadway 50% preleased before they break ground.

EDIT: Anyone seen KC Gridlocks Seattle thread? Holy shit are they lightyears ahead of us? And look at Qwest Field god am I jealous of them, same metro size as good ole SD :rolleyes:

[QUOTE=mello;2931655]:previous:

Watch I bet Irvine won't wait to get 700 Broadway 50% preleased before they break ground.
QUOTE]

Do you know that banks actually have to finance a project before they can begin construction? Shocking, isn't it? The only reason why the Irvine Co will break down regardless, is because they have so much cash, there is never any hold up with a bank. In fact, they finance themselves any project under $100 million. Not too many developers can do that.

People arriving in trains rather than cars is a benefit. I don't think anyone is marketing HSR as being unique to San Diego. It would be unique to other parts of the country... but not other countries like France, Germany, Japan, Tiawan, China... a list that keeps growing.

Also, wouldn't you rather see fewer cars in downtown San Diego? Less need for parking stalls and more effecient use of land? You may not have kids now, I don't know, but wouldn't you rather see them breathing cleaner air. Or how about visiting the ocean... wouldn't you rather see it from a beach rather than a sea wall to keep back rising oceans waters? Or, if our country is going to go to war for something, wouldn't you rather it be for something having more merit than securing access to oil?

I am not saying HSR will solve all problems... it will not. It will take changes across society at many different places.


If built, HSR would be the largest public works project in California's history. The size of it is too big to do in one phase.


Airport vs HSR is not an "either" or "or" proposition. If built, HSR will reduce demands on the airport... not replace. Heck, no one is even saying that it would reduce the necessity to expand or replace Lindbergh. Afterall... doesn't Lindbergh need longer runways to handle larger planes intended for far more distant locations? If anything, HSR it would push back the critical point in time that Lindbergh reaches its theoritical capacity for handling takeoffs and landings... that's assuming HSR is up and running before then.

Either way, I am sure we all agree that SD needs transportation improvements to meet demands of getting in and out of the region.

Oh so true...everytime i look at the towers that could've been compared to that "timeless" (cough, cough) box now, i get sad.

Off topic, here is a diagram of this year's 4th of July fireworks show on the bay.... Any ideas where the best spot will be to see it ALL? Cabrillo monument would be great but it closes at 5pm. Point Loma would be good too, obviously shelter island. Too bad most of the best waterfront vantage points for this show are military bases and off-limits to public.
http://www.chrisaustinphotography.co...arge-chart.jpg

We were talking about how an airport would positively benefit SD's ability to attract and encourage corporate expansion/relocations.

Yes I know that banks have to finance a project... I don't know how long you have been on the forum or paying attention to downtown developements but many people back in 2004 and 2005 (don't know exactly when Catellus backed out) thought that Catellus had the deep financial pockets to finance this project on their own.

I know it is rare and it takes a big ass developer to do this, but there was one if not 2 articles in the San Diego Metropolitan where industry insiders were dissapointed that Catellus didn't step up and finance Santa Fe Place by themselves. Many thought it could have been a homerun building and quickly filled after it was completed (or during construction). They struggled to get the preleasing though and sold the land.

No, Catellus changed business plans and turned into a REIT. That's why they didn't go through. They also sold off the entire mission bay project parcelled off (some to Bosa as well).

I'm sure few of you will agree with me, but I prefer the 700 B-way building over the Santa Fe buildings. I believe the last thing we need are more twin towers, even if the heights do vary a little. In addition, 700 is taller and more stately/classy in my opinion. I have a thing against buildings that look the slightest bit nautical, and to me Santa Fe looks slightly nautical in my opinion.

I agree with you about 700 Broadway and the fact that San Diego does not need any more twin towers. But nautical themed buildings can look nice, if done right. ;)

If anyone has pictures or anything to add to any of the threads about individual projects, be my guest:)

I think the building I'm anticipating most (after Vantage Pointe) is the Hilton. I've been skeptical but I'm anxious to see how it will fit in being between the bridge and the rest of downtown. I also like the way buildings look when they're rising and looking all industrial...especially this one because it's basically on top of the port.
Thanks again SDUrban
http://i4.photobucket.com/albums/y12...s/IMG_8940.jpg

Hindsight is 20/20 but Catellus probably would still have vacancies in their buildings if they had decided to develop the office sites. The sale of 2 sites to to Bosa was probably a good thing for them.

Wereldhave is happy with 5% return when fully occupied? Another example of too much money chasing the same asset class. Quick, sell them some more buildings at the top of the market.

The Irvine Company is a different animal. They are reinvesting their own money, not debt. I have heard from sources close to the source that their office buildings/apartments/hotels, etc. generate $50+ million per month in pre-tax income (after expenses). They (Donald Bren) have an incentive to reinvest (instead of paying huge tax bills).

If you outbid TIC on a project that they actually wanted, you can be sure that you paid too much.



Office high-rise sells at top price

Dutch firm buys Broadway 655 tower in downtown
By Mike Freeman
UNION-TRIBUNE STAFF WRITER

July 3, 2007



JIM BAIRD / Union-Tribune
The price of more than $550 per square foot for Broadway 655 is believed to be the highest ever paid on a square-foot basis for an office tower in downtown San Diego.
Institutional investors continue to snatch up San Diego office buildings at record high prices, with the latest being Rob Lankford's Broadway 655 tower downtown.
The 23-story office high-rise, also known as Advanced Equities Plaza, was sold late last week to Wereldhave, a real estate investment firm based in the Netherlands. The company paid $210 million for its stake in the 381,043-square-foot high-rise, or more than $550 per square foot.

That price is believed to be the highest ever paid on a square-foot basis for an office tower in downtown San Diego, real estate brokers said. It eclipses the roughly $520 a foot that the Irvine Co. paid for One America Plaza in 2006.

“That is just a huge number given the existing income (from the building) and also the challenge with leasing the lower floors,” said Andy La Dow of Grubb & Ellis/BRE Commercial real estate. “They still have the sixth and seventh floors vacant in the building.”

Lankford, a longtime San Diego developer, completed Broadway 655 in late 2005. It was the first office high-rise built downtown since 1991. The building remains 20 percent vacant.

For Wereldhave, the purchase marks its entrance into the West Coast office market. It owns properties in Dallas and Austin, Texas, as well as the Washington, D.C., area.

The company said in a statement that it intends to expand its West Coast commercial real estate purchases because of “increasing economic activity.”
“As you can see from the purchase price, they are an aggressive buyer,” said Kraig Kristofferson, a senior vice president with CB Richard Ellis and part of the team that represented Wereldhave in the transaction. “It is a good indication of the fact that there is still significant investment dollars interested in institutional-grade real estate in Southern California.”

Wereldhave beat out several bidders for Broadway 655, including the Irvine Co. Irvine has made the biggest bet on San Diego County commercial buildings over the past several years. It spent nearly $1 billion buying six of the 12 top-quality office towers downtown. It also invested more than $1 billion to buy 21 office towers in University City and Mission Valley.

Commercial buildings have been hot properties for the past few years in several U.S. cities, including San Diego. Buyers flush with capital are paying record prices and accepting very low initial returns on their investment.

What makes San Diego attractive to these institutional buyers is the belief that lease rates will skyrocket.

“Rents are clearly going up in downtown San Diego based on the purchase price,” said Bill Palmer, chief executive of The Palmer Team in Sacramento, which was the lead broker on the transaction.

So far, new landlords attempting to aggressively boost rents have met with mixed results, brokers say. Most have not been able to push up rates as fast as they would have liked, thanks to a recent surge of new construction and tepid demand for office space. The vacancy rate for office space in San Diego County has increased from 9.8 percent at year's end to 12.2 percent in the second quarter, according to CB Richard Ellis.

Wereldhave said it will achieve a 5 percent return once the building is fully leased, which it expects by year's end.

The company must pay interest on debt for a building that is 20 percent vacant. It also must pay for tenant improvements and broker commissions to get the empty space filled. That means the initial return is likely to be less, brokers say.

Still, over the long term, investors like the fact that San Diego has a relatively stable office market with lease rates that are likely to rise, Lankford said.

“Compared to other major cities, rates are still a bargain and still have room to move up,” he said.

Lankford retained a small ownership stake in the tower, and his company will continue to manage and lease the building. Lankford declined to say what percentage he still owns. Real estate experts estimated the total value of the transaction was $213 million to $215 million.

The sale includes 12 apartments near the office tower.

Law and financial firms are the largest tenants in the building, including Lerach Coughlin Stoia Geller Rudman & Robbins, Best Best & Krieger and Advanced Equities Financial Corp.

I have a different take... that it began with Mello's post on #69. The subject was about filling up the downtown condo's... the inability of the current make-up of the employee base and lower salaries in being able to afford those units... and then how SD needs more corporate stuff and whatnot. You cited the airport in being able to attract those and I cited that the next thing on the horizon is... you got it... HSR.

I never said an airport was not needed for business... or that HSR is adequate for a corporate environment (But, it obviously couldn't hurt). It is simple you see... I indicated that HSR is the next thing on the horizon.... as in it will likely happen before an airport solution is in place.

I know we agree on one thing... transportation improvements are needed to accomodate the future San Diego.

^^^ I think an inherent question is this: How much profit margin is fair for companies? How much should the owners and top brass be making?

Lets face it most people who are 23 through 38 (ages of people who would love to live downtown) only make around 30k to 50k per year. I would say the vast majority make that much money.

So how much would it hurt companies bottom line's and profit margin's to pay people 60k to 100k instead?? Because in reality this is what would need to be made in San Diego County to actually be "middle class". Anything under 60k per year in this town is "lower class" in my opinion. Once you make more then 60k you move into the middle class.

So when will salaries/wages ever fucking go up in this city? Are companies and their executives greedy? Or can they only pay in the 30k to 50k range because that is the only way their businesses can survive?:shrug:

Companies will raise salaries when they cannot recruit the people they want or need.

And, they will not arbitrarily raise salaries of existing employees unless they are certain they want to retain them. Sometimes they will not even do that because their decision is based on hind-sight methods.... or on retention or turnover rates. If turnover is too high.. they'll vet their options and raising salaries would be one of those... an option.

^^^ You still didn't answer my question, would companies not be able to survive if they were forced to raise salaries. How much money do these companies deserve to make? Like I said the middle class in San Diego is almost gone. Harldy anyone makes over 80k a year. The masses are wallowing away on measly pay for the prices of housing, goods, and services in this County.

IMO 80k per year in this metro is barely middle class especially if you don't already own real estate.

]

You're partly correct, but certain jobs/industries pay more than others. If SD (and it's people) want higher paying jobs, they're going to need to attract companies in those industries.