San Diego Take a look around downtown San Diego and new apartment towers — previously a rare sight — are sprouting up like never before.
Prior to 2003, there was only one market rate apartment tower of more than 100 apartments in the entire county, according to CBRE.
That one was AVA Cortez Hill, a 299-unit complex at 1399 Ninth Ave., built in 1973.
Since 2003, nine apartment towers have been built — all but one in downtown San Diego, according to CBRE.
They include Towers at Costa Verde, Allegro Towers, Vantage Pointe, Strata, Ariel Suites, Pinnacle on the Park, The Rey, Alexan ALX and Shift.
As of mid-August, 10 are under construction, and more are in the planning stages.
“This is something that 15 years ago, you wouldn’t have seen nor would you have thought possible,” said Kevin Mulhern, a senior vice president of CBRE in San Diego.
“San Diego, in spite of itself, is finally becoming a big city,” Mulhern said. “It’s part of the maturation of the city.”
The reasons for the boom are partly rising rents, which are high enough to cover construction costs, and a ready market of baby boomers who are downsizing, millennials, and out-of-towners who want the active lifestyle of living in an urban environment but don’t want to plunk down more than $1 million to buy a condo.
“As San Diego has grown, particularly with what’s happened in downtown and what we’re starting to see in UTC, we finally have a big enough rental pool of renters by choice,” Mulhern said. “These are people with a lot of disposable income.”
Darcy Miramontes, executive vice president of JLL in San Diego, said, “You’re likely seeing high rise construction specifically downtown because the land that is available lends itself to high-rise construction. There isn’t enough land downtown to build a garden community with parking.”
Buildings Go Up, Not Out
Downtown property is so expensive that developers “go up because they can’t go out,” Miramontes said.
Construction of Petco Park, which opened in 2004, also has been a factor, sparking a surge of building near the ballpark in East Village.
“I think it all would have happened eventually but I think that jump-started it by 20 to 25 years,” said Tim Winslow, senior managing director of Cushman & Wakefield. “There were a lot of warehouses and parking lots — things that were over 40 years old that were under-utilized.”