Del Mar Highlands, Carmel Valley’s biggest shopping center, has enjoyed a relatively unchallenged existence, but the vacant lot across the street is moving closer to development – and will give the Highlands a run for the money! In yellow are the residential units that will face DM Heights Rd.
From the U-T:
Carmel Valley residents recently received a large, full-color brochure describing the proposed One Paseo town center development at El Camino Real and Del Mar Heights Road inviting additional community feedback for the project that was first proposed two years ago.
The project includes 270,000 square feet of retail space, including a cinema, 557,000 square feet for offices, 600 housing units and a 150-room hotel along with 4,000 parking spaces in a total development of 1.8 million square feet, half of which is proposed to be residential.
“We’re expecting a lot of comments because many people have been in opposition and have voiced their opinions,” said Renee Mezo, project manager with the city of San Diego Development Services.
In response to a request from the Carmel Valley Community Planning Board on April 9, the review period for the project has been extended to May 29. Development Services staff members will respond to comments, after which the project will be reviewed by the city’s Planning Commission. The commission will hold a public hearing slated for this summer and will submit a recommendation to the City Council.
“We’ve taken comments from the community and are incorporating them,” said Robert Little, vice president of commercial development for Kilroy Realty, the project’s developer. The company is based in Los Angeles with an office on Valley Centre Drive in Carmel Valley.
“We are hearing that people want a special mix of shops not just all high-end boutiques; they want daily needs stores like variety food stores along with clothing stores, and a place to gather with outdoor seating and dining,” Little said.
He envisions a high-end center, which he calls a “hybrid retail lifestyle center” with a promenade.
The draft environmental impact report concluded that the project would significantly affect the area, particularly with parking and noise; the brochure stated that traffic issues would be addressed. Plans call for adopting a traffic light synchronization along Del Mar Heights Road between High Bluff Drive east to Carmel Valley Road.
To view the environmental report, go to onepaseo.com or sandiego.gov/redirect/pubnotceqa.html. Residents can email comments to DSDSEA@sandiego.gov with project number 193036 in the subject line or email talk@onepaseo.com or call (858) 408-1934.
Kilroy Realty bought this plot from Pardee for 87.9 million (3.8 mil/acre) back in 2007.
This is great, we need more high-density housing. NCC needs much more.
My understanding of this is that it was once designed to be much smaller and much less invasive but the developer lost their ass on the land so they needed to jack up the square-footage of the residences and retail space in order to make the development pencil out. Personally, I would rather see them lose their ass than over-build this space.
Ha ha ha carmel valley sucks
I don’t know if anyone has ever been to that Ralph’s right there. It is the most crowded, congested, annoying store I have ever seen. So, now you add a bunch of residents but instead of adding a new grocery store, you add a bunch of boutiques?
It really doesn’t make sense. I’m sure they will grease the local politicians and make it happen, though.
http://www.signonsandiego.com/uniontrib/20080202/news_1b2kilroy.html
From 2008:
Kilroy Realty of Los Angeles paid nearly $88 million for 23 acres of bare land at the southwest corner of Del Mar Heights Road and El Camino Real. The site is approved for 500,000 square feet of buildings, so the price tag of $175 per buildable square foot is believed to be the highest ever for office land in San Diego County.
How high is it? Kilroy’s price eclipsed the $90 per buildable square foot that The Irvine Co. of Newport Beach paid last year for 1.5 acres at the northeast corner of Broadway and Pacific Highway in downtown San Diego, where it plans to build a 34-story office tower. Boston Properties, a real estate investment trust, purchased an office site at 250 W. 55th St. in Manhattan last year for roughly $230 per buildable foot.
Carmel Valley, the hottest office market in the county, still is attracting investment. The home of many top-name law firms, the business district has the highest monthly asking rents for office space in the county, averaging $3.82 per square foot, according to CoStar, a real estate research firm.
It also has one of the lowest vacancies at 8.7 percent. Last month, Veralliance Properties, backed by financial partner Prudential, bought the Neurocrine Biosciences office campus for $109 million, or $495 per square foot.
The 23-acre site Kilroy is buying is the last development parcel remaining in Carmel Valley. When longtime owner Pardee Homes put it up for sale last year, about 20 companies submitted bids, said Rick Reeder, a broker with Grubb & Ellis/BRE Commercial who worked on the sale.
Kilroy is Carmel Valley’s dominant office landlord. It built the former Peregrine Systems campus and last year finished a 450,000-square foot campus for Intuit along state Route 56.
The Intuit campus was a “home run” for Kilroy, said Michael Knott, an analyst with real estate research firm Green Street Advisors in Newport Beach. “A lot has to go right for this (latest deal) to be a home run,” Knott said. But Knott and other analysts said this land was important to Kilroy, a publicly traded real estate investment trust. By purchasing the site, it can control what buildings are constructed there and when – thus preventing a rival from competing with Kilroy’s existing structures.
In addition, Kilroy is talking with the city and homeowners groups about increasing the amount of development allowed, Chief Executive John Kilroy said in a conference call this week with analysts.
“We are cautiously optimistic that it could turn into something many multiples of what is currently entitled,” he said.
Kilroy added, however, that if the city doesn’t allow more structures, buying the site still makes sense for the company.
“We underwrote it based upon the 500,000 square feet and based upon where we think rents are and where they are going,” Kilroy said. “So, I want to say again, on its own merits, it worked for us.”
Based on the land and building costs, monthly rents for buildings on the site could approach $5 per square foot, said Bill Fleck of The Staubach Co., a brokerage that represents tenants.
“With our clients, there is significant reluctance at the $4 rent number,” Fleck said. “So while I understand that Carmel Valley has been the most desirable office market in San Diego County, I think at some point there is going to be resistance to continually escalating rents.”
Getting more building space approved on the site could help Kilroy offset the high price it paid for the property. And retail is a logical option for part of the property, said Louis Taylor, an analyst with Deutsche Bank Securities.
“We expect them to work with the city to try to get more density there,” Taylor said. “There are a lot of towns that are starved for sales-tax dollars, so if you could incorporate retail there, it would help. It’s a big site.”
The land price dictated they build a Caddy, but are instead proposing a mountain of Pintos.
sdduuuude, you’re right the original plan was only 500K Office space.
“Based on the land and building costs, monthly rents for buildings on the site could approach $5 per square foot, said Bill Fleck of The Staubach Co., a brokerage that represents tenants. ”
Too bad class A office is listed and not being leased for more like $3/SF in North County right now. One of the newest and nicest office buildings in San Diego, the US Bank building right off La Jolla Village and the 805, is asking just over $3/SF for the penthouse suite.
Of course the Commercial real estate bubble didn’t really pop until mid 2008.
500,000sf in 2008 to 1,800,000sf now – wow!
I wonder if Pardee feels like a chump now?
Here is an interesting view on the current housing market.
http://www.laobserved.com/biz/2012/05/if_the_housing_marke.php
There must be four or five empty, high quality, office buildings near that US Bank building close to La Jolla Village and the 805. There doesn’t seem to be any lack of office space nearby in UTC.
Well they got to put the HD stuff somewhere.
I see a lot of empty Retail space just about everywhere.
But Good luck with that
I thought the 600 new condos sounded like a load, but there are 5,459 condos under 2,000sf in 92130 currently.
“There must be four or five empty, high quality, office buildings near that US Bank building close to La Jolla Village and the 805. There doesn’t seem to be any lack of office space nearby in UTC.”
There’s no lack of space up in 92130 either. The Vacancy rate for Class A office in 92130 >15% and the rental rates are just above $3/sf on average. There’s all kinds of availability just south of this location on High Bluff and El Camino Real.
“I wonder if Pardee feels like a chump now?”
They might, but selling at the top of the commercial real estate bubble is a good consolation prize.
Kilroy will do just fine with that office space over time. They have the low cost capital to start the build now and be in a great position a few years from now for a recovering market. There are very few large blocks of space 100ksf+ in true class A bldgs in class A locations.
Remember, you cannot wait to build a bldg till everything is perfect as you will miss the window. Need to build as the bottom is getting a bit long so that you are ready to sign leases into an improving economy, let rents increase, then sell into the peak.
I bet a new, large user who will take an entire bldg (or large part of one) will jump all over the northern location and amenities to avoid the traffic crunch that develops between DMH and LJVD.
Since I’ve moved to Carmel Valley, I’ve noticed there are no auto parts stores. Guess I’m the only one who works on his own car. Think there will be an O’Reilly at One Paseo? (Ha!)
Also, there are no credit union branches or ATMs. And Home Depot is too far away. But my commute is nice.
Carmel Valley residents very negative about this – especially add’l amount of cars it will put on Del Mar Heights.
Glad I moved out of Carmel Valley. What an area run amuck with development. The new freeway really did the area in and ruined the atmosphere is Del Mar. If I want to live in LA, I can move there right?
“I would rather see them lose their ass than over-build this space.”
And over crowd the area. I tend to view less government as better – but SoCal residents have a history of getting raped by big developers. We spend huge amounts of money to have our kids go to the best schools and then just ignor it when developers make driving and shopping a nightmare while constructing future slums.