Is Downtown San Diego Getting Younger?

SAN DIEGO—The Downtown submarket is starting to age down and is becoming the place where young professionals want to live, work and play, the Richman Group of California Development Co.'s president Luke Daniels tells GlobeSt.com. After recently receiving approval from Civic San Diego to develop a major mixed-use apartment complex Downtown at 330 13^th St., we spoke exclusively with Daniels about the project and the demand for mixed-use properties in the Downtown submarket.

GlobeSt.com: Is there a demand in Downtown San Diego for more mixed-use projects of this type?

Daniels: We believe so in strategic locations with unique aspects. In the case of our recent entitlement, 330 13^th, the site had many constraints that we leveraged into opportunities, such as being adjacent to the new iconic library. Additionally, Downtown San Diego is a grid of streets that run east, west, north and south, and there's only one street that turns at a 45 degree and that's Park Blvd., which runs dead into our site. The site also sits on the trolley line and, it's adjacent to Petco Park at the south end of Downtown. By leveraging all of these constraints, we were able to blend an A+ product at this A+  location that will offer blue-water views forever and a day. As it relates to the market, we were very strategic in developing our mix, which will be 30% studios, 30% one-bedrooms and 40% two-bedrooms; this results in a project that has 70% of the mix that are considered to be price-point-sensitive homes by the customer. The bottom line is we think there is demand for more mixed-use projects, but the end product has to be unique and well-located within the submarket.

GlobeSt.com: What about other San Diego submarkets?

Daniels: San Diego is a city of villages, and when we think about the various parts of San Diego—metro, coastal, outside of Downtown—we believe that there's tremendous demand. We're looking at other strategic locations and working to identify sites where we can build projects, but have not been able to secure anything new to date.

GlobeSt.com: How do you see Downtown San Diego changing over the next several years as the submarket continues to draw tenants, investors and developers?

Daniels: By our count, during this cycle and over the next several years there's going to be more than 8,000 market-rate multifamily units built in Downtown San Diego. One of the metrics we are analyzing is can employment can match this residential growth rate? We're looking at a higher growth rate than what took place during the last cycle between 1997 and 2007, which we classify as “the condominium boom.” It's extremely important relative to the overall vibrancy of Downtown that more employment gets added and specifically to the East Village—for example, new cutting-edge projects and the authors of  I.D.E.A. District or Makers Quarter must continue to focus upon employment. We are seeing cutting-edge, small, high-tech firms with young professionals coming Downtown for the live/work/play lifestyle, a combination of startups and companies moving from other parts of the county, and this trend is very positive. The last cycle was really dominated by the condominium boom, and this cycle is being dominated by market-rate multifamily rental homes. The result seems to be that Downtown is starting to age down; it's getting younger. We see Downtown as being the place where the young professionals who want that lifestyle are going to be. The focus upon employment is to continue to create the demand within the submarket that can match the supply as San Diego continues to evolve as one of the great cities over the next several years.

GlobeSt.com: What else should our readers know about the 330 13^th St. project?

Daniels: We were able to introduce two architectural authors on the site—RW Quigley and DesignARC. That creates true fine-grain development when you have two personalities designing on one block. We'll also be able to leverage the seismic fault zone that runs right in the middle of the site to become a paseo that connects the Village at K St. to our site on 13^th St. The paseo will be open to the public during daytime hours, creating a parklike setting, and it will be secure to the residents in the evening hours. Lastly, we had the opportunity to turn the tower on a 45-degree angle on the block. This allowed us to create a symbolic front door looking down the terminus vista toward Harbor Dr., but it also allowed us to pay respects to the iconic Library dome, to be set back from the dome and let it breathe. The organizing principle of the design is that these constraints needed to become opportunities and positive attributes in order to become a unique project for downtown San Diego.