Commentary by Alan Nevin
The southern reaches of San Diego County have received scant press during the past decade, perhaps because nothing new has occurred there except for the new Cross Border Express (which is a big deal!).
2017 will put a stop to that dearth of newsworthiness.
This year will mark the first in what I perceive to be a decade-long binge of development, highlighted by a massive investment in infrastructure and new housing, both sale and rental.
Spirited development of South County was going rather smoothly a decade ago. And then it stopped, very suddenly.
The culprits were both the economic malaise of our nation and, for San Diego County, the absence of shovel-ready dirt. Our massive production in the 2000-2007 timeframe consumed all our lots and land in south County (and north county, too).
Today, an aerial shot reveals an enormous amount of dirt movement as investor funds pour into south County. Most of that activity is on the Otay Ranch, straddling the 125 Tollway, and Ocean View Hills, straddling with I-805. The cast of homebuilders include Pardee, Shea, Cornerstone, Colrich KB and Meridian.
Millenia, ultimately with 3,000 units, has a strong entry of apartments, townhouses and commercial activity. Millenia is exceptionally well sited, immediately adjacent to the 125 Tollway and next door to the Otay Town Center and two neighborhood centers.
The first apartment project to be completed at Millenia was Pulse, a Fairfield offering with 272 units and now almost rented up. Next to follow in the rental realm is a 229-unit project by ConAm and Trammell Crow with 309 units.
On the sale housing scene, Meridian now has five townhome projects underway in Millenia, three by Stratford (Evo, Metro and Trio) and two by Shea (Element and Z) and soon to come KB Homes. In that same neighborhood, two affordable rental projects are underway: the 87-unit Duetta family-oriented rental project and the 123-unit Villa senior project
The really good news is that most of the sale product will be in the $300,000 to $500,000 range, a target that fulfills the need of a great percentage of first time San Diego homebuyers. And most of it is townhomes, a product that has been largely ignored by developers as long as there was plenty of land for single family homes.
And rounding out the mix in Millenia, Sudberry Properties will soon break ground on 135,000 square feet of retail space. Ayres will be building a 140-room hotel and Lee Chesnut is under way with the first phase of what will ultimately be 350,000 square feet of first class office space. The first phase consists of two four-story buildings with 159,000 square feet.
Next door to Millenia is General Growth’s Otay Town Center, a noble effort that has not lived up to its developer’s expectation and has just announced the exit of two of its key tenants: REI and Anthropology. But help is on the way if they can hold out:
During the next decade, more than 10,000+ new residential units will be developed in their trade area as Otay Ranch pursues its final build-out.
In Otay Ranch, Village 2, a Baldwin enterprise, is about to explode with five new townhome projects and three single family projects, most all priced between $350,000 and $550,000.
Elsewhere in Otay Ranch, HomeFed Corporation has the lands in Villages 8,9 and 10, which combined, total 10,000 units, 80% of them multi-family. A lot of grading is going on.
In Ocean View Hills, both Pardee and Cornerstone have multiple projects: Cornerstone with three and Pardee with three, all priced sensibly.
And we must not forget Pacifica’s 1,500 unit mid-rise towers that will, at some point, glorify the now very dull Bayfront in Chula Vista.
Down at the border, life goes on. There is about to be substantial activity, both infrastructure and residential, and maybe even a little commercial. The City is going to float bonds to encompass the entire 9,300-acre Otay Mesa Planning Area. The first wave of infrastructure would cover 2,000 acres. The money would be used primarily for highway improvement but also include some funds for fire stations and parks.
Perhaps the only downside to the massive incarnation of south county is that the north- south highway system will not improve, thereby causing interminable delays for folks trying to reach north county where most of the jobs are and will be.
Life goes and the south will rise again!
Alan Nevin is the Director of Economic Research for Xpera Group, the County’s largest source of experts in construction and real estate. Alan’s new book, The Great Divide, is available on Amazon and Kindle. It is about the next 25 years in America and how business must adapt to that future.