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Bubble Discussions Are So 2005, Panelists Say

Bubble, bubble, no toil and no trouble. That was the consensus at the Burnham-Moores Center for Real Estate, University of San Diego’s sixth annual Residential Real Estate Conference, “Outlook 2006,” in December.

“I am weary of bubble discussions,” was how the keynote speaker, Leslie Appleton-Young, vice president and chief economist for the California Association of Realtors, summed it all up. “A bubble? Not to me. It’s a good market, but the frenzy is over.”

Her fellow panelists agreed, pretty much echoing the caveat that everything is relative. Yes, appreciation rates are softening, after sky-high spikes, but residential real estate still is a solid investment, compared with stocks and bonds, they say.

Appleton-Young pointed to the “amount of wealth” created because of appreciation, with people “liberating equity and spending their money.”

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“It isn’t going to be happening anywhere where we have seen it in the past in 2006. I think we’ll see people staying in their homes longer, refinancing, or remodeling their homes instead,” she said.

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Most For The Money:

Bubble or no bubble, Oceanside “remains one of the most affordable housing markets in San Diego County,” according to Coldwell Banker Residential Brokerage of San Diego/Inland Empire.

“Whenever we do comparison pricing for our clients today, Oceanside offers buyers the most house for the money,” said Cheree Dracolakis, a Realtor in the Carlsbad office, which serves the city.

How much house? According to Dracolakis, she’s talking about a 1,500-square-foot detached home with three bedrooms, two baths on a 7,000-square-foot lot for $500,000, noting median-priced homes in the county are now around $600,000.

“In Orange County, you couldn’t buy anything other than a townhome or condominium for $500,000,” she said. “But if someone is willing to live here and make the drive to Orange County every day, they can own their own home.”

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End Of An Era:

A couple of landmark properties in San Diego, both originating in 1926, are being reborn.

The last of the landmark Pickwick Hotel’s monthly guests have been relocated to other housing, while the 80-year-old hotel prepares for renovation.

“The process was not an easy one, but the outcome has been so positive for so many, that it was inspiring,” said Andrea Winslow Upp, the hotel’s general manager.

Built in two phases, original construction was started on the Pickwick in 1926, ending with 234 rooms with full en-suite bathrooms. The marketing slogan back then: “A Room and a Bath for Two and a Half.”

Construction on what is planned as a visitors hotel is scheduled early this year, and is expected to be completed in time for the 2006 holiday season. The estimated cost for the rehab is $16 million.

Meanwhile, renovation of the 1926 Bush’s Egyptian Theater is complete, spawning the Egyptian Lofts, an $18 million mixed-use retail and residential condo project in Hillcrest.

Designed by Austin Veum Robbins Partners, the 156,000-square-foot building occupies the corner of Park Boulevard and University Avenue, with 80 one- and two-bedroom condos and 79,000 square feet of retail space on the ground floor.

The project was designed to “acknowledge the Egyptian theater revival style, and link it to the modern urban housing surrounding it,” according to Austin Veum.

Engineering team members include Miles Douglas Corp. as the construction manager; Glotman Simpson, structural engineering; project design consultants, civil engineering, Neal Electric, electrical; McParlane and Associates, mechanical; Megan Bryan Studio, interiors; and Deneen Powell Atlier, landscaping.

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Sapphire Scoop:

The marketing folks for Sapphire Tower, a 330-story luxury high-rise in Downtown San Diego’s Columbia District, gifted media outlets with pints of Haagen-Dazs ice cream, a container of sprinkles and an ice cream scooper to announce that more than 25 percent of the posh homes have been sold in the now-completed first phase.

Boasting ocean and bay views, walls of glass and direct elevator access to the penthouses, “Downtown has never seen such luxury,” they tell us.

So, where are the hot fudge and whipped cream then? A few cherries some nuts?

Just wondering.

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Big Deals:

Pillsbury Winthrop Shaw Pittman’s San Diego office closed on more than $1.9 billion , that’s with a B , in real estate loans in 2005. The team, led by partner Angela Yates, also included Steven Hamilton, Diane Young and Linda Stanwood.

“Money was plentiful in the real estate and equity markets and, as a result, there was more money chasing good deals,” said Yates. “The borrowers benefited from the competition and the lenders made good returns.”

Among the transactions she worked on during 2005, Yates represented lenders for projects at the former Naval Training Center in San Diego, involving construction loans for residential and office projects, and for renovation of historic buildings.

Yates predicts that 2006 will bring more infill projects in Downtown’s Gaslamp Quarter.

The 45,000-square-foot Torrey Hills Family Medical Center in Carmel Valley has been sold for $19.3 million. The buyer was Torrey Hills Medical Building, LLC and the seller was Sorrento Hills Marketplace, LP. Paul Braun of Colliers International brokered the transaction.

S.R. Market Properties has sold Scripps Ranch Market Place Phase II, a 28,700-square-foot multi-tenant retail center in Scripps Ranch, to Tres Pinos, Ltd., for $15.1 million.

Reg Kobzi and Joel Wilson of the CB Richard Ellis Private Client Group’s San Diego office, along with Peter Orth, represented the seller. Eric Tompkins, also with the San Diego office, and Glenn Karp, with Coldwell Banker Commercial, represented the buyer.

The Club at Big Bear Village, a luxury private residence club and high-end resort at the entrance to the Village of Big Bear, has received final approval from the California Department of Real Estate to complete “fractional” property sales.

San Diegan Richard La China, partner in Last Resort, LLC, along with Ray Gibson, bought the club in January 2004, marking it as one of the largest transactions in Big Bear history, according to a club spokeswoman.

Fractional, we’re told, is a variation of the time-honored time share. Each club villa, valued at $1.3 million, can be sold in a one-tenth ownership, or any fraction thereof, but there will be no more than 10 owners per villa.

La Jolla-based Hampstead Partners, along with its affiliate Hampstead Development Group, was the developer of Banneker Homes, a 108-unit multifamily property in San Francisco, which recently received an OK from the U.S. Department of Housing and Urban Development.

Hampstead joint-ventured with the management company, Alton Management Corp., and the seller, Banneker Homes, Inc., a nonprofit, and together “tackled a myriad of issues,” creating a redevelopment plan that covered uncharted grounds, we’re told.

Banneker Homes sold the property to Banneker Homes Partners, LP for $8.1 million.

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Land Shark:

The Schenck Building Co. of La Jolla has been contracted by the Science Museum of Minnesota to install a model of a Megalodon Shark, a major attraction of the San Diego Natural History Museum’s new permanent exhibition, Fossil Mysteries, which opens in July.

The 34-foot-long, 5,000-pound shark is so big that it was shipped by truck in six pieces , head, body, tail, dorsal fins, and two pectoral fins.

Just when you thought it was safe to get back on the road.

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Kudos:

North County Realtor Chuck Smiar has been installed as the 2006 president of the North San Diego County Association of Realtors.

Smiar, who works out of Prudential California Realty’s Escondido office, succeeds Kevin Forrester as the top elected officer of the association, which includes nearly 7,000 members.

Heather Benson, a Realtor with Prudential’s Carlsbad office, is president-elect and will succeed Smiar next year.

La Jollan Christopher R. Scott, inventor of Profile Lumber, was featured in the December issue of Automated Builder, a major manufacturing and marketing magazine.

Profile Lumber designs, develops and licenses leading technologies in housing construction and specially designed lumber.

The Commercial Realtors Association of San Diego, at its 10th annual Deal Maker Awards bash in December, honored several brokers for their accomplishments last year.

Those feted from CB Richard Ellis were Rick Sparks, the executive vice president of the company’s business park properties, and Doug Lozier, senior vice president, recognized in the office category; Mike Moser, a senior VP, in the retail category; Kevin Mulhern, a senior VP, along with Richard Schneider, first vice president, and Dixie Hall, first vice president, for multifamily.

Victor Krebs, a senior VP at Colliers International, was recognized under the land category; Ron Beck, a VP investment specialist of Coldwell Banker Commercial Towne Centre, and Thomas Olson, senior VP and principal of the company, in the industrial category.


Send residential and commercial real estate news to pbroderick@sdbj.com or via fax at (858) 571-3628.

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