Trends & Projects in San Diego’s Commercial Real Estate Industry

   RealShare conferences are an informative and robust networking experience. They are part of ALM’s Real Estate Media Group, and these conferences (held nationwide by GlobeSt.com) cover topics such as national investment and finance, apartments, and healthcare real estate. Recently, two members of the Dowling team attended a RealShare event at the La Jolla Marriot to learn more about the state of San Diego’s commercial real estate (CRE) industry.

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RealShare San Diego Panel Discussing How Millennials are Changing Office Space

 
There were four panels comprised of a mix of very knowledgeable industry professionals including the CEO of JMI Realty, John C. Kratzer, the Senior Vice President, Manager- Commercial Real Estate of Wells Fargo, Kelly Souza, and the Curator of DeskHub, Inc., Monique Williamson. The various panels discussed current and upcoming development in San Diego, San Diego’s capital structure, market impact and outlook for San Diego, and how millennials are changing CRE rules.

 

Here are a Few Highlights Discussed at the Conference:

  • Millennials are changing developer mindsets
    •  Companies and spaces are becoming more focused on employee “wellness” (Think bike racks, fitness centers with showers, Wi-Fi in outdoor community spaces)
  • There is a transformation back to dynamic and authentic culture from the volume era of superstores and suburbs
  • Consumers are becoming more sophisticated and conscious
    • They expect sustainable, efficient and highly amnestied projects
  • Open concept, high ceilings, food (gardens, full-kitchens, food trucks) and fitness are trending in office spaces
  • San Diego CRE is in “the bottom of the 6th inning”
    • Speakers agreed SD CRE is well-positioned relative to other cities, but we are approaching the end of a cycle and a correction is coming
  • Now is a time for lenders and buyers to be very selective and disciplined
  • San Diego is a build to sell market
    • Businesses establish their success here, and either relocate or sell

Projects to Look for in the San Diego Skyline:

  • Makers Quarter: SLP Urban Planning
    • 6 blocks, 1 million square feet of office space, 2.5 million square feet of development and the largest outdoor plaza/park in downtown inspired by organic culture and art/performing arts
  • F-11: The Richman Group of California
    • Affordable yet upscale apartments geared toward the maturing millennial
  • Library Tower: The Richman Group of California
    • A 22 story mix-use high-rise containing apartments and commercial space
  • Scripps Ranch Technology Park-Murphy Development Co.
    • A 55 acre technology, corporate headquarters, and R & D campus
    • Provides a wealth of amenities
    • Modern, sustainable “new era” of office spaces
  • 7th and Market: Cisterra Development
    • A mix-use space downtown that will include a Ritz Carlton, Wholefoods, public parking, outdoor plaza, apartments/condos, 150 thousand square feet of office space, fitness center and spa
  • Convention Center Expansion
  • 50 plus acre re-development of East Harbor Island
  • By the end of Summer, we should know the future of Seaport Village and the Embarcadero
  • Possible new Charger Stadium

    Although San Diego is an expensive market for office and residential spaces, our year-round sensational weather and ability to uphold the “work hard, play harder” mentality  continues to attract lenders, developers, and entrepreneurs. With no drastic changes in the market, we should see success in San Diego’s CRE industry for the next ten to twenty years, with many phenomenal projects in the mists of breaking ground. Any day of the week you can take a stroll through downtown and observe the massive amount of construction currently taking place which generates substantial income for the City, as well as provides jobs, future work spaces and homes for San Diego residents.  As long as San Diego continues to be one of the most desirable cities in the United States (and we all know that it will), the demand for both residential and commercial real estate will remain constant.

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