Developer Plans Two Downtown Multifamily Towers at $550 Million Mixed-Use Project
By Lou HirshCoStar News
December 19, 2023 | 1:10 P.M.
Developer Stockdale Capital Partners plans to add 850 apartments to its $550 million mixed-use redevelopment of a former Westfield mall in downtown San Diego, where work is nearing completion on office and retail properties.
Los Angeles-based Stockdale said it plans to break ground in 2025 on a 40-story, 518-unit apartment tower at its Campus at Horton project, which will be followed by a second 40-story tower with 332 apartments. The apartments are part of larger, long-range concept plans approved earlier by San Diego officials and are in early design phases, a Stockdale statement said.
“With the addition of two new residential towers, we are deeply committed to the future activation of Campus at Horton and continue to make major investments in this one-of-a-kind asset for downtown San Diego,” Stockdale Managing Partner Daniel Michaels said. The company did not disclose the development costs for the apartments, to follow the developer’s prior investment of about $550 million to date.
Stockdale says the first apartment tower will include 12,600 square feet of ground-floor retail off Broadway Circle, with 616 parking spaces spread along seven floors. When completed, both towers would complement a total of about 700,000 square feet of office and retail space nearing completion on the site of the former, 33-year-old Westfield Horton Plaza mall, which closed in 2018 after being acquired by Stockdale.
Stockdale previously announced the first retail tenants for Campus at Horton, including grocer Sprouts, Shake Shack, Sweetgreen and Salon Republic. Stockdale officials said the developer recently added the Rumble Boxing gym chain to the initial tenant mix, as it continues to negotiate with other prospective retail, office and life science tenants. Office and biotech tenants have not yet been announced.
Plans for the first apartment tower include an internal pedestrian walkway that brings residents from the lobby to the commercial component of the campus, the developer said. Residents of both towers would have access to a rooftop pool, gym, clubhouse and dog park.
The multifamily addition comes as new downtown San Diego apartments have been generally well received and quickly leased up by a growing population during the past decade. The vacancy rate for the market currently stands at 8.1% as demand has slowed in the past year, according to CoStar Market Analytics data as of Dec. 19.
“Any new housing is welcome across the region, and adding it at the Campus at Horton makes sense,” said Joshua Ohl, senior director of market analytics for CoStar Group in San Diego. “The campus will include 300,000 square feet of retail and experiential space, and the housing will provide a built-in consumer base for the property.”
Ohl said the planned apartment towers, to be built adjacent to office and retail space already near completion on the campus, would provide potential housing for the employees who eventually occupy the office portion. “That could make those renters less car-reliant, which has been a goal of San Diego’s regional planning agency,” Ohl said.
Downtown San Diego’s office landlords, like those in other big-city urban centers, have struggled with rising vacancies and tenant space pullbacks as companies adjust to employee preferences for hybrid work arrangements stemming from the COVID-19 pandemic. Stockdale is facing a downtown office climate that includes a 26.3% vacancy rate and a 37.7% availability rate when subleasable space is factored in, according to CoStar data.
Others dealing with the situation include nationwide biotech developer IQHQ, which has a $1.5 billion life science campus under construction on the downtown San Diego waterfront but has not yet announced tenants.
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