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BlokHaus Shows Its Creativity in East Village Commercial Projects

Renovations are nearly complete on the old Wonder Bread factory in East Village, one of the projects helping to transform the neighborhood into hip, creative space.

The renovation, renamed WonderHaus, sits on a 1-acre block across from Petco’s Tailgate Park parking lot , within view of the ballpark.

Four tenants have signed leases, averaging $1.65 to $2.25 per square foot, in the 56,000-square-foot Class C office building.

“We like to go into the areas that are not developed yet,” said Jim Torti, a senior development manager at San Diego-based BlokHaus, which is developing several other projects in the neighborhood. “I think the transit issue being close to the trolley and freeway help. Proximity to downtown is good, but it’s value-priced. You can be in downtown without downtown rents, which are $1.75 to $2.25.”

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Downtown Focus

BlokHaus was founded by Graham Downes in 1998 as a “think tank” for projects focusing on urban infill and adaptive reuse, predominantly near downtown areas.

Operating in San Diego and Las Vegas, the firm has three employees. They identify proprietary projects that are then designed and built by Graham Downes Architecture Inc., a 40-member firm.

The firm does not disclose revenues, but Torti says BlokHaus and Graham Downes have doubled revenues in the last several years.

“There’s some creative space around downtown, but not a lot of it. So I think the fact that we have something with a lot of texture , that’s raw, open and malleable , is quite appealing to a lot of people,” said Torti. “They are looking for the economics and looking for value. I think we’re appealing to a lot of that.”


Unique Space

Eugene Marchese, president of Constellation Property Group, in February moved his company into a 5,500-square-foot loft inside a warehouse renovated by BlokHaus.

“We were looking around town for some unique space that would sort of reflect who we were and what we were trying to do,” said Marchese, whose rent on Columbia Street was set to increase to $2.75 per square foot.

“The price is very competitive compared to what we were going to be charged in the new lease,” said Marchese, who plays rugby with Downes.

ParkHaus is priced at $1.25 to $1.50 per square foot. Besides Constellation Property Group, tenants include Reaper Graphics Co. and the San Diego Padres.

BlokHaus spent $500,000 to convert the space, Torti says.


Carving Out Niche

While the San Diego office market is softening , vacancies rose to 13 percent in the 2008 first quarter compared with 11 percent in the 2007 first quarter, according to Studley Inc., a New York City market research firm , BlokHaus is focusing on a certain niche.

“We’d like to do more adaptive reuse, not just for the sustainability, but economics. It allows us to make improvements, add value, reposition the property and revitalize the area,” Torti said.

Graham Downes’ headquarters are located in one of its first projects, a former rescue mission built in 1910 that’s been renamed BarrioHaus.

The nearly renovated WonderHaus building , tenants start moving in June 1 , has suites ranging from 1,200 to 20,000 square feet. Incoming tenants include: The Honest Kitchen, which has leased 3,500 square feet; Spice Thai Asian Kitchen, 1,800 square feet; Cocchia Clothing, 840 square feet; and Carpathia Corp., 730 square feet.

“Our target is to be 50 percent leased in June,” Torti said. “We’re a little shy of that goal but it’s still our target.”

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