BY SARA D. ANDERSON
It’s becoming common knowledge that the real estate market is in flux.
“That is the biggest issue that most people are dealing with today. The (property) values have dropped correspondingly across the board,” said Malcolm Davies, principal of San Diego-based Davies Development & Investments Inc.
However, Davies is not most people.
The downtown-based Davies team, consisting of Pasquale Ioele, chief operating officer; Anthony Morreale, director of investor relations; Cort Davies, director of entitlements; and Jesse Tenenbaum as the project manager and analyst, looks for “niche opportunities,” desirable locations for development projects regardless of the market and variable factors.
Within the past four years Davies launched his company and became a partner with Sand & Sea Equity Group LLC of San Diego. Together they worked on 31 projects, which resulted in more than $240 million worth of real estate projects. In 2007, he left the partnership and resurrected Davies Development & Investments, operating as a developer, investor and capital provider.
Despite static in the industry, Davies expects his company will participate in four to five new projects for 2008. He declined to disclose revenues.
Among them is The Nolen, a $16 million office project that will begin construction in March.
The mixed-use redevelopment project in the ballpark district is named in recognition of landscape architect John Nolen’s visions for land use and planning in San Diego. The project intends to follow Davies’ mission of incorporating “live, work, play,” which Davies sees as “emblematic” of Nolen’s visions. With the downtown entertainment and restaurant venues increasing, Davies is working on incorporating the work aspect: “Downtown San Diego has a really small percentage of businesses compared to most CBDs (central business districts) across the country,” he said.
The structure is a 13-story office condominium with the ground floor reserved for retail space and the top 12 floors being sold for offices. Each floor will be sold separately, and have private elevator access to each suite. The 40,000-square-foot floors are averaging sales at $2 million each.
The top five floors will have balconies with views of Petco Park, San Diego Bay and Coronado, and the 10th floor will have an exterior terrace.
Michael LaBarre, president of architecture and planning firm Fehlman LaBarre Architects Inc. and the architect involved in The Nolen project, said each floor is “designed as an open office loft, exposing the structure as part of the architecture and allowing contemporary design of the office space of the buyer.”
So far, three investment companies have purchased four floors. Mala Nani Properties LLC purchased the first floor and the penthouse, Bankers Hill Properties purchased the second floor, and Superior Mortgage purchased the 12th floor.
LaBarre describes his project as an “ambitious undertaking,” fitting 13 stories of floor space on a 5,000-square-foot parcel previously occupied by a one-story brick warehouse. Standing at 142 feet, three sides of the structure are adjacent to other buildings; two sides being a storage facility and one side a hotel, leaving the fourth side predominantly glass.
In a prime location at Sixth and Island avenues, The Nolen will be adjacent to Hotel Solamar and across the street from the Marriott Renaissance Hotel and Stingaree restaurant and nightclub, and a block and a half from the recently opened Hard Rock Hotel.
Parking is sparse, but Davies Development & Investments has a lease agreement with Hotel Solamar for 13 parking spaces , one space will be allocated to each floor’s tenant.
Davies Development & Investments will apply for “green certification” of The Nolen from the U.S. Green Building Council. The Leadership in Energy and Environmental Design, or LEED, designation is awarded through a building rating system that focuses on site development, water and energy conservation, recycled materials and the interior environmental quality. The performance measurements are based on the design, construction and operation of the building. LEED designation will be decided when the project is completed, which is scheduled for spring of 2009.
Davies Development & Investments purchased The Nolen contract from James Brennan and Mitchell Compton at EnDev LLC for $500,000. EnDev worked on the design and was involved during the early stages of the project with Fehlman LaBarre and the downtown redevelopment agency Centre City Development Corp., which approved the project in April.
EnDev is an entertainment development company, behind the development and innovation of such clubs as Stingaree and Side Bar in the Gaslamp Quarter. The company also has experience with real estate development, and recently worked on three residential condominiums and three projects developing office condos.
Michael LaBarre and Project Architect Duane Hagewood are contracted with Davies Development & Investments to provide design development services, construction documents and construction administration for The Nolen. Founded in 1991, Fehlman LaBarre has been behind 13 major projects in San Diego covering the retail environment and urban mixed-use projects.
This will be Davies Development & Investments’ second development project downtown. Nine to Five Place is a reposition of an existing old building formally known as the Old Chicago Title Building. The 65,000-square-foot office condominium will stand at six stories. Renovation and construction will be completed in March. Davies Development & Investments invested more than $5 million in upgrades.
Sara D. Anderson is a freelance writer based in San Diego.