Intracorp President Keith Fernandez (photo/alandeckerphoto.com)

From parking lifts to wine tasting rooms, Downtown developers are getting more creative in the amenities offered to make housing projects stand out. They seem to be doing a good job. At the end of 2005, there were fewer than 100 units available within the eight completed residential projects in the 92101 ZIP code. In other words, of the 1,524 units opened, 1,425 were sold.

Under construction this year are 20 projects for 3,527 units, of which 2,018 already are sold. Eight conversion projects make up another 570 units, of which 137 are sold. Projects scheduled to start construction this year but not be completed in 2006 will add another 28 buildings totaling 4,072 units to the market. An additional 454 additional apartment units Downtown could be converted to condos.

That’s a lot of housing. And those figures come with a “maybe.”

“I think you will be hard pressed to see all that happen,” says Russ Valone, president MarketPointe Realty Advisors, which tracks home sales. “I don’t think they all will come out of the chute. I think difficulties in financing, skepticism about the marketplace Downtown and stuff like that will keep a lot of those off the market.”

Escalating building costs are frustrating Intracorp, which has halted one project while it has another well under construction and a third awaiting city approval for additional stories. Park Terrace, a 223-unit condominium project east of Petco Park, is about one year away from completion. Intracorp President Keith Fernandez says sales are going well and remaining units number in the high 20s. “We’ve had to be a bit more aggressive in broker co-ops, but for the most part we’ve been pretty happy (with sales),” he says. Proximity to the ballpark and the smaller size of the units make this project stand out. Fernandez says the efficient floor plans result in better price points for buyers. Prices start in the high $200,000s.

It is a different story for Triangle, a 57-unit project at 14th Street and Imperial Avenue and more on the edge of East Village. “Construction costs have gone so high that we are going to sit for a while,” Fernandez says. The builder expects to start construction on the more centrally located Strata, at 10th and Market, by year’s end. First it awaits city approval to add six floors to the planned 230-unit, 17-story building. If given the go-ahead, and if construction costs come in “reasonable,” the project will break ground before the end of the year. “Other than that we are not looking in Downtown,” Fernandez says. “We think the market has flattened a bit and construction costs have risen significantly. Plus the housing fees will be rising.” Intracorp is looking for other opportunities in the suburban market and focusing on Hawaii.

Four Down, Three (Or More) To Go

Still singing the praises of Downtown building and forging ahead is Bosa Development, which got into the market early and has locked up premier sites both in established neighborhoods and near the bayfront. Bosa has completed four projects and has three more on the way.

“People are really looking for high-value property that offers unique location and amenities,” says Brett Schaffter in the Bosa Sales Center. “They want something that sets it apart from what I call the ‘cookie cutter’ condos Downtown.”

Under construction by Bosa are Electra, with one unit remaining for sale, listed at $499,800, within the 248-unit project, and the Legend, with half of its 178 units sold out in 10 weeks.

Electra should be complete in early 2008. This is Downtown’s tallest residential waterfront community, and the developer has integrated the historic SDG&E Station B building on Broadway into the community. But Bosa doesn’t stop there. Among the amenities is a seven-story conservatory where residents can socialize and gaze at the stars. Schaffter says committed buyers include many empty nesters from North County, young professionals and move-up buyers.

Work on Bosa’s Legend, on the same super block that is home to Petco Park and the Park at the Park, should be finished by fall 2007. “You can walk right out the front door to the park,” Schaffter says. Units are priced from the mid-$500,000s to high $900,000s. Buyers have been mainly young professionals, second-home buyers and people moving from beach communities and Mission Valley. Amenities include the second-floor rooftop deck with pool and spa and the seventh-floor social lounge, which opens onto a 3,200-square-foot rooftop deck with outdoor fireplace and lounge. Both decks overlook the Park at the Park.

In the fall, Bosa plans to start work on Bayside at the Embarcadero with estimated completion in early 2009. Consisting of 236 units, it sits along Pacific Highway and the North Embarcadero, which is due for a huge pedestrian-friendly upgrade. “You can’t live any closer to the water than Bayside,” Schaffter says. “This project also offers larger size units for those who want to move up.” Units will range from 1,200 square feet to 3,300 square feet. Amenities will include wine tasting and theater screening rooms. Prices are yet to be determined. “We are seeing a loyal following for Bosa projects,” Schaffter says. “And we are starting to see a real maturity in Downtown.” He says now that property is no longer available and development is starting to slow, resales will pick up the slack. “There is a lot of activity here.” Bosa has locked up enough Downtown property to build at least six more luxury towers.

Renting To The Creative And Hip

Gilman Bishop is senior project manager at OliverMcMillan. (photo/alandeckerphoto.com)

In trying to attract the hip and artsy, OliverMcMillan is hard at work on four projects that will add condominiums to the for-sale market and apartments for rent.

Aloft on Cortez Hill is designed to appeal to a wide range of buyers, offering 168 units that overlook the heart of Downtown and Balboa Park. The five-story structure combines unique lofts with traditional condominiums in studios, one, and two bedrooms available in late summer. “We have gone with contemporary architecture and coupled it with spa-like design of the common areas to facilitate a feeling of calm in the middle of the city,” says Gilman Bishop, senior project manager at OliverMcMillan. “Certain elements bring it together, like sunning patios, pool, Jacuzzi, bamboo garden and sun-filled foyers. When you look at our interior design, you’ll find it is directed toward a hip, urban crowd. I’ve found that loft-style living encourages creativity.”

A bit more contemporary, The Lofts at 677 Seventh Ave., offers 148 residential units in an urban style building that provides a mix of unique platform bedrooms, live-work units, studios and one- and two-bedroom lofts. The project features an underground parking structure, workout room and courtyard. Units will be available for rent in late spring.

Displaying a public art feature on its exterior walls, The Lofts at 655 Sixth Ave., is located at the gateway to the East Village. Artistically screened balconies provide views to the streets. Studios and one- and two-bedroom lofts are featured as well as a patio and underground garage. The project will be available for rent in late summer of 2007.

Within an eight-story building a few blocks from Petco Park and the Gaslamp Quarter, OliverMcMillan is building 208 residential loft studios and one- and two-bedroom lofts with private terraces. Bishop says the central location of The Lofts at 707 10th Ave., puts it in a growing artist community and entertainment destination. Work will begin this summer and units will be available for rent in summer 2008.

A Project That Will Feed Residents

To feed all these new residents, SRM Development is building a grocery store into Market Street Village. Located on the east side of 14th Street between Market and G streets, the project will house 228 apartment units and Albertsons. Work on the 44,000-square-foot supermarket begins this month with the apartments ready for occupancy in the fall. The apartment building will feature a pool and hot tub, exercise room, roof deck and outdoor fire pit. SRM may decide to sell, rather than rent, the units.

Moving through the approval process is SRM’s Axiom, a 213-unit condominium project that includes brownstone townhomes, pool located on top of a nine-story tower with hot tub, outdoor fireplace and community room. This will be for sale in the “affordable luxury market,” says David Guthrie, development manager for SRM Development. “Although this will have many amenities similar to the higher-end projects, it will be a more affordable project than many in the East Village.” Prices are yet to be determined.

“The market is changing,” Guthrie says. “Speculators have moved on to other markets and absorption has slowed — not widely unexpected but always dramatic when it occurs. So you’ve got a number of projects that aren’t going to get built and you have excess inventory that has to be absorbed. It’s going to take a little time. There is going to be some softening in prices and more buyer incentives. But we are still very bullish on Downtown San Diego. We think its longer term prospects are still fantastic; shorter term, there is going to be excessive supply to work through.”