SAN DIEGO—When IDEA1 was first conceived more than three years ago, it was considerably different than the project that recently broke ground Downtown, panelists at CREW San Diego's lunch presentation here yesterday told attendees including GlobeSt.com. The event, titled "IDEA1: A Case Study in Collaboration and Creativity," drew in members and guests interested in hearing more about the residential-but-flexible project Lowe Enterprises is developing in the East Village area of Downtown San Diego.
IDEA1 began as a true mixed-use concept of 50% office/50% residential, the brainchild of Mike McNerney, SVP of Lowe, David Malmuth and Pete Garcia from I.D.E.A. District, McNerney said. "Pete, Dave and I formed a partnership with a compelling vision for what we wanted to do." The original idea was something different for the East Village, "a place to connect, collaborate and collide; to innovate; to blend work, chilling and gathering," according to the video presented at the event.
What emerged was a largely residential project with space for ground-floor residential as well as work/live ground-floor lofts aimed at "makers" or entrepreneurs. "Our original concept was an environment for entrepreneurs," said McNerney. "Now, we want to grow East Village companies."
According to Bess Wakeman, EVP, agency leasing for JLL, the problem with the office component was that companies weren't migrating Downtown as quickly as the developers had hoped when the project was conceived. "We needed to convince users there was a need for office space Downtown." While the percentage of office users in the Downtown San Diego market is ramping up, it wasn't moving fast enough for IDEA1 to remain half office. So, the developers sat down at the drawing board and reworked the idea, redesigning it to be more residential in nature.
Darcy Miramontes, EVP, multifamily, for JLL, said, "The East Village is a hotbed of multifamily development and is the next frontier of multifamily development" in San Diego. She said lenders were worried initially that there was too much multifamily development in the area to justify this build, but while some older properties were renting for below $3 per square foot, this figure has increased to as much as $3.75 per square foot in some of the newer properties.
Stephen Adams, managing director, asset management, for LaSalle Investment Management, said what attracted his firm to the project was that it had started off as an office project with some multifamily and became a multifamily project with a potential retail component. "Through great design, it is able to morph back into a more commercial property when Downtown San Diego has people working as well as living down there."
Adams said San Diego is a target market for his firm, one that's hard to break into, and this project seemed like the right fit. "They have a great product—it's not plain vanilla; it has staying power; it has some meat to it."
The redesign came from the Miller Hull Partnership. Principal Caroline Kreiser said the developers kept the concrete from the original building and turned it into a warehouse for apartments that can later convert its floorplate for office use. The hub, an open courtyard in the center of the project, will be surrounded by residential and eventually office.
Moderator Lynn LaChapelle, managing director of JLL, said that because the project morphed from a mixed-use to a more pure residential play, it became marketable. The fact that the concrete part of the project can eventually be converted easily to office use is the icing on the cake.
The project will take 22 months to complete, and McNerney is anticipating complete lease-up could take six to seven years. Parking needs, which will be alleviated somewhat by the East Village green underground parking structure, will also be mitigated by mass transportation including the trolley, people movers and bike-riders, which are expected to grow in number by the time the project is finished.
In addition, sustainability features include a possible Energy Star rating, solar hot water and energy-efficient appliances. McNeerney said with Title 24, "almost everything you build meets LEED requirements even without the certification." Adams added, "Tenants wants LEED features, but they don't want to pay for them." He said that this project offers a happy medium of affordable sustainability features. Kreiser concluded, "The biggest part of the project is how it brings the community together."
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Carrie Rossenfeld
Carrie Rossenfeld is a reporter for the San Diego and Orange County markets on GlobeSt.com and a contributor to Real Estate Forum. She was a trade-magazine and newsletter editor in New York City before moving to Southern California to become a freelance writer and editor for magazines, books and websites. Rossenfeld has written extensively on topics including commercial real estate, running a medical practice, intellectual-property licensing and giftware. She has edited books about profiting from real estate and has ghostwritten a book about starting a home-based business.
