Redevelopment Opportunities Set San Diego Up For More Housing
Investors Spent More Than $500 Million in 2021 To Redevelop Commercial Sites
By Joshua Ohl
February 7, 2022 | 3:17 P.M.
One of the hottest trends among investors in San Diego is buying and repurposing aging industrial, flex or office buildings into high-end lab space to meet the soaring demand among biotech firms that have been driving commercial leasing in the area.
But investors have also been scooping up aging properties of all stripes with the intention of converting them to housing. That includes country clubs, auto body shops, office buildings, vacant big boxes and old industrial facilities.
San Diego is serially undersupplied with housing, and infill development provides a way to add housing within more dense corridors in the county, or on sprawling fairways in some instances. The local housing commission estimates that San Diego needs to add roughly 15,000 housing units annually to keep up with household formation and demand. Yet, the county has been only adding about half of that level on an annualized basis.
Of those sale transactions where a unit count could be confirmed at the time of the sale, investors have the potential to add at least 2,400 new units to the region’s housing inventory in the coming years.
It is likely that there will be several thousand more units that enter the pipeline as a result of those redevelopment deals from last year, but entitlements often were still in various stages and the full scope of developments wasn't known at the time of the sale.
That includes sales such as the one for the Grossmont Center in La Mesa. The mall property will likely be redeveloped in the coming years, and the site is zoned for upward of 3,600 housing units, although plans have not yet been released.
Similarly, the 13-acre parcel on which Zion Market and Kearny Mesa Bowl sit sold as a redevelopment project last year, but details on how many housing units will be built have not been publicized.
Conversely, other plans are more straightforward. In San Diego's Normal Heights neighborhood, local developer INI Greenfield purchased the former DiMille’s Italian restaurant at 3492 Adams Ave. in December for $4 million, or about $8.7 million per acre. The developer plans to demolish the restaurant during the second quarter of 2022 and begin redeveloping the site into a seven-story, 178-unit apartment project that is scheduled to take two years to complete.
In Carlsbad, R&V Management acquired an aging industrial site at 1205 Aviara Parkway in November for $26.5 million, or about $2.6 million per acre. Although plans weren’t released at the time of the sale, in 2021 the Carlsbad Planning Commission approved a proposal to develop a 329-unit apartment community at the site.
According to CoStar research, at least $210 million was invested in properties in San Diego in 2021 with the intention of redeveloping them into housing units with a confirmed count. Those deals worked out to a cost of about $8.5 million per acre.
Sales such as the Grossmont Center are not included in that figure.
If we aggregate all the redevelopment sales from 2021 where the intention was to reposition the property into housing, then more than $510 million in sales were recorded. That cumulative total works out to more than $8 million per acre paid for the redevelopment opportunity.
All content provided on this blog is for informational purposes only. The owner of this blog makes no representations as to the accuracy or completeness of any information on this site or found by following any link on this site. The owner of will not be liable for any errors or omissions in this information nor for the availability of this information. The owner will not be liable for any losses, injuries, or damages from the display or use of this information. Keywords: San Diego Commercial Real Estate For Sale, Commercial Property In San Diego, Commercial Real Estate In San Diego, San Diego Investment Real Estate, Commercial Property Management In San Diego, San Diego Commercial Property Management, Commercial Property Management San Diego, Managed Commercial Property San Diego, Commercial Property For Sale San Diego, San Diego Commercial Real Estate Leasing, Top Real Estate Agents in San Diego, Commercial Property in San Diego, Property Management Company San Diego, Real Estate Agent in San Diego, San Diego Commercial Real Estate Real Estate Agent Contact Us Brokerage, Property Management