San Diego Business Journal

Westfield Group is ratcheting up previously announced plans to overhaul its Plaza Camino Real mall in Carlsbad, with the tab now estimated at $300 million by the time it’s completed in fall 2016.

The second half of the mall renovation, projected earlier at about $100 million, will go well beyond cosmetic enhancements, Westfield officials said. Plans being submitted to Carlsbad city officials within the next few weeks call for operators to “completely transform” the western end of the mall from an indoor facility into an open-air lifestyle center.

Westfield will remove the center’s roof and create an upscale regional shopping destination with lush landscaping and comfortable seating in its common areas. It will also have a new mix of retail, dining and entertainment options, with the roster still to be announced.

The Carlsbad Planning Commission is expected to consider the plan this fall, and it will then be reviewed by the City Council, with construction set to begin next year. The 45-year-old mall will be renamed Westfield Carlsbad when the renovation is finished.

Westfield estimated the full project will create more than 1,200 construction jobs and more than 1,000 permanent jobs in the new commercial spaces. Later this year, it will be opening components of the remodeling’s first phase, covering the center’s eastern portion, which began last fall and includes the addition of a 24 Hour Fitness Super Sport, a new luxury Regal Cinemas and several new sit-down restaurants.

With traditional indoor malls on the decline nationally, open-air elements — conducive for relaxing, lingering and spending — have been a crucial part of several mega-makeovers at local shopping centers during the past four years. Those include Simon Property Group’s Fashion Valley in Mission Valley, Protea Properties’ Flower Hill Promenade in Del Mar and Westfield’s own Westfield UTC at University Towne Center.

• • •

Lane Field Hotel Work Starting: The end is near for that downtown parking lot off Pacific Highway that was long ago the Lane Field ballpark, home to a minor league forerunner of today’s San Diego Padres.

Developers — in a joint venture known as Lankford Phelps Portman Lane Field LLC — recently announced a scheduled May 8 groundbreaking for the long-discussed $130 million, dual-brand hotel complex being built on the site, after formally securing financing for the project.

An early 2016 opening is now planned for a 253-room SpringHill Suites and a 147-room Residence Inn — both Marriott brands — along with 27,000 square feet of retail and more than 400 parking spaces. They are the first hotels to be built on a 5.5-acre site at Pacific Highway and West Broadway, owned by the Unified Port of San Diego.

Developers said AIG Global Real Estate Investment Corp. will serve as a limited partner to the development venture, and U.S. Bank will provide construction debt financing. The development team includes San Diego-based Lankford & Associates, Portman Holdings of Atlanta and Colorado-based general contractor Hensel Phelps Development.

• • •

Parking Will Cost More at Downtown Lot: Another change in downtown San Diego’s Embarcadero area will be manifested on parking meters. Port commissioners recently approved a six-month pilot program — going into effect May 15 — that will take meter rates from $1.25 to $1.75 per hour in the port-controlled parking lot off Harbor Drive at G Street, adjacent to the Fish Market restaurant and commercial fishing piers at Tuna Harbor.

It’s the place where many visitors park when viewing the port district’s military art collection, including the oversized “Unconditional Surrender” sculpture replica featuring the kissing sailor and nurse, near the USS Midway Museum.

Port officials said the pricing experiment is geared toward generating more parking turnover in the popular tourist area, along with more revenue, where parking is at capacity seven days a week. Weekends get the thickest parking traffic at Tuna Harbor, with many parking all day Sunday in that lot for free.

For the next six months, the new pricing for the lot’s 186 meters will be enforced from 10 a.m. to 8 p.m.; it is currently 8 a.m. to 6 p.m. Monday through Saturday. And Sunday enforcement will be added, with posted holidays remaining free.

Port staff in December will be presenting results of the pilot program to commissioners.

• • •

Stored Value in Real Estate: Storage units don’t just provide space for stuff that won’t fit in your apartment — or things sitting in limbo between housing situations — and how they’re filled up is important to more than cable TV reality show buffs.

Investors see them as a sizable sector for placing commercial real estate bets — at least big enough to be tracked by companies like Marcus & Millichap Inc. The brokerage company’s recent report on the self-storage sector notes that San Diego’s unit vacancy rate has been tracking behind the national average for the past two years, with the local rate dropping from about 14 percent in 2012 to a forecasted 12 percent for 2014.

The upshot is that rising occupancy will enable storage business owners to lift asking rents this year at climate-controlled and nonclimate-controlled facilities — 2.3 percent and 3.1 percent, respectively. Marcus & Millichap is projecting that per-unit local monthly rates this year will reach $167 for climate-controlled facilities and $117 for the nonclimate-controlled.

San Diego’s self-storage supply is at 4.2 square feet per capita, and California’s is at 5.1 square feet, both below the national supply of 7.4 square feet per capita.

“The self-storage sector has built momentum over the last year as the U.S. economy has strengthened,” Marcus & Millichap researchers said. “Total employment is fast approaching its pre-recession peak, supporting rising storage demand.”

Send commercial real estate and development news of general local interest to Lou Hirsh via email at lhirsh@sdbj.com. He can be reached at 858-277-8904.