San Diego Hums With Commercial Building Activity
Alonzo Horton’s idea was to go south--to develop nearly 1,000 acres of land he purchased in 1867 south of Old Town--to create this city’s present downtown.
Since that time, however, the direction of development in what is now California’s second-largest city has been largely to the north, with Mission Valley, Tierrasanta, Kearny Mesa, the Golden Triangle, Sorrento Valley, North City West, Rancho Bernardo and the whole North County region the focus of most of the residential and commercial development in San Diego County.
San Diego is experiencing one of its periodic booms in commercial construction, from the Sorrento Valley area in the northern part of the sprawling city to continued growth in the Golden Triangle area around University Towne Center and a revival of interest in Mission Valley to major construction in downtown San Diego that will see the completion next February of Symphony Towers, the city’s tallest building.
Not far from the 34-story, 499-foot-high Symphony Towers, the long-awaited San Diego Convention Center is scheduled to open in the fall of 1989, according to Donna L. Alm, communications manager for Convention Center Corp., the agency that will operate the facility for the city.
Debt-Free Center
The 760,000-square-foot structure, she said, will have six tennis courts on the roof, a 450-seat amphitheater and the capability to serve 6,000 meals at one sitting.
The nearly $150-million facility will be debt-free when it opens, Alm said. The land was furnished by and the center financed by the San Diego Unified Port District.
The center was designed by a joint venture of three architects: Deems, Lewis, McKinley, San Diego; Loschsky, Marquardt & Nesholm Architects, Seattle, and Arthur Erickson Associates, Los Angeles. Alm said that San Diego will have the capacity to handle conventions with 10,000 to 20,000 delegates.
Even with more hotels under construction or in the planning stages, San Diego could not handle the really big conventions, Alm added. There are 4,500 hotel rooms in downtown San Diego, a number that will nearly double to more than 8,000 in 1991, she said.
According to Heinz A. Schilling of Keyser Marston Associates Inc., a consultant to the Centre City Development Corp., there are four hotels under construction downtown, with a total of 1,338 rooms. They are: Embassy Suites, 337 rooms and Ramada Inn, 312 rooms, both opening later this summer; Marriott Suites Hotel in Symphony Towers, 262 rooms, and Emerald Shapery, 427 rooms. The latter two are expected to be completed in 1989 or 1990.
Office Vacancy Drop
In the planning stages are four more hotels with a total of 2,346 rooms, Schilling said. They are: Hyatt Regency, 875 rooms, next to the Marriott that was formerly the Inter-Continental; Roger Morris Plaza, 750 rooms; Front Street Plaza, 371 rooms, and Brunswig Square, 350 rooms.
From a nearly 30% office vacancy factor in 1984, downtown San Diego dropped to a manageable 12.3% vacancy rate in the first quarter of this year, according to the Grubb & Ellis brokerage.
Much of this absorption has been from the expansion of such service sector tenants as lawyers and accountants.
The so-called Golden Triangle, centering around the University Towne Centre shopping mall at Genesee Avenue and La Jolla Village Drive, is the site of several major office complexes, the busy 360-room La Jolla Marriott and the Naiman Co.’s $190-million Aventine mixed-use development, designed by in a Post-Modern style by architect Michael Graves. The Aventine development will also include a 400-room Hyatt Regency Hotel.
This San Diego equivalent of Los Angeles’ Century City or the San Fernando Valley’s Warner Center also has massive housing developments, such as the Bren Co.’s 3,594-unit La Jolla Colony, and research and development projects like Joseph Development’s Chancellor Park, where 542,000 square feet of R&D; and office space will cater to the research and development needs generated in large part by UC San Diego, a few minutes to the west.
Like Century City and the Olympic Corridor in Los Angeles, the Golden Triangle is beginning to attract law firms.
New Construction
One of the pioneers in the area is Luce, Forward, Hamilton & Scripps, which in the summer of 1987, occupied a floor of the Regents Square II building near the Marriott. The 115-year-old firm has more than 100 attorneys occupying five floors in the Bank of California building in downtown San Diego.
Despite high vacancy rates in the entire North City area--defined as including Miramar West, Sorrento Valley and the Golden Triangle area--more than 2 million square feet of office space will be constructed in the area by the end of the first quarter of 1990, according to an analysis by Torrey Urban Research Institute (TURI).
The independent research and analysis firm forecasts a steady quarterly absorption of 272,125 square feet per quarter for the next eight quarters, which should bring the vacancy rate down from its current 23.3% level to 18.3% by the first quarter of 1990, according to TURI president Ron Barbieri.
Design Center
Research and development space in North City currently is at a vacancy level of 14.6% on a base of 9.5 million square feet, Barbieri said. More than 760,000 square feet of new space is expected to be constructed by the end of 1989.
The $45-million, 342,000 square-foot San Diego Design Center by McKeller Development, La Jolla, is expected to shave a lot of travel time off the schedules of the area’s design community, according to Jon Van de Grift, communications manager.
“Since we’ll have virtually all of the major showrooms in our project, San Diego design professionals won’t have to fight the traffic every time they need to visit a showroom,” he said. The architect is Johannes Van Tilburg & Partners, Santa Monica.
Last year, the San Diego City Council approved an assessment district that will permit development of four projects on 208 acres along the San Diego River in Mission Valley.
The four projects--Hazard Center, Park in the Valley, Rio Vista West and Mission Valley Center-West--are expected to have up to 2.6 million square feet of office space, 444,000 square feet of retail space, 1,625 hotel rooms and 2,181 dwelling units.
This construction should contribute to the “substantial oversupply” of office space in the Mission Valley area by the end of the first quarter of 1990, according to a TURI report.
Vacancy Rise Seen
With 503,000 square feet under construction in such developments as the first 12-story tower of Rio Vista Towers--next to Rio Vista West, and 348,500 square feet planned for construction, the office vacancy rate should jump from the current 20.4% to 27.6% by the end of the first quarter of 1990, according to TURI’s Ron Barbieri.
Morgan Dene Oliver is more sanguine about Mission Valley. The chief executive officer of Oliver McMillan Inc. is developing the $100-million Rio Vista Towers project with CalMat Properties Co. at the southeast corner of Stadium Way and Friars Road.
