Casey Brown Co. just recently completed a comprehensive renovation of the Old Town Plaza workplace home, which it bought last year.Credit: Casey Brown Co.Old Town is among San Diego’s most popular tourist areas, including an Old West-style boardwalk with a basic store, authentic Mexican dining establishments and unspoiled historical homes and hotels harking back to the city’s founding in the early 1800s. In recent decades though, it
has actually not been especially considered a place for brand-new workplace development. Local developer Casey Brown Co. and its brokers are wagering they can alter that, following the current conclusion of a$ 3 million restoration of the two-building office park called Old Town Plaza. CoStar information shows the developer paid$ 13.8 million in January 2017 for the 65,000-square-foot, 44-year-old home at 2251 San Diego Ave. Inning Accordance With Casey Brown’s brokers at JLL, the Spanish-style complex now has brand-new common-area corridors, together with a conference room, kitchen and updated lobbies and washrooms. At a time when everyone appears to be updating to satisfy the needs of the innovative, co-working workplace culture, can this property and others in Old Town compete with those in more prominent workplace markets with gleaming new structures, like those found in downtown and University Town Center? Brandt Riedman, a vice president in JLL’s San Diego office, notes that Old Town Plaza is already 70 percent inhabited by tenants such as marketing firm Power Digital. Brokers recently signed Knockaround, which sells budget friendly designer sunglasses and is relocating from the city’s Barrio Logan neighborhood. Riedman said the tactical plan going forward for Casey Brown, and likely other owners in Old Town, will be to continue pursuing the
smaller sized innovation and other startup firms and service providers that have actually been gravitating to older structures in downtown San Diego in the last few years. He said he understands of at least 2 other owners of nearby Old Town workplace properties who are planning restorations to contend for the smaller sized companies, normally
led by more youthful operators looking for areas with a particular historic character to start a business. For numerous reasons, however, there’s no sign that Old Town is gearing up for a significant wave of workplace tear-downs or brand-new building and construction.” Normally there hasn’t been a lot of workplace redevelopment taking place recently because area,” stated Riedman, who is managing leasing of Old Town Plaza with JLL’s Richard Gonor and Tony Russell. Most of the big current tasks in Old Town continue to be tailored towards hospitality. T2 Advancement opened a 179-room Hilton Garden Inn on Taylor Street in late 2015, and Hotel Investment Group bought a 10,000-square-foot office property on Moore Street in late 2016 with strategies to convert it into an extended-stay boutique hotel. Old Town’s offices have actually typically been older and low in supply. CoStar data reveals a relatively tiny present stock of 3 million square feet for the submarket that includes Old Town and the adjacent Midway and Liberty Station communities. Another aspect is that office tasks in Old Town should be low-rise in nature, due to local and federal height restrictions put on advancement within the flight paths of nearby San Diego International Airport. Riedman, nevertheless, stated renters have still been drawn in by Old Town’s direct access to public transit– among the city’s biggest trolley and bus centers lies there– its distance to the airport and its area near the area where Interstate 5 meets Interstate 8. Numbers from CoStar Market Analytics show the Old Town area’s office metrics generally benefitting property managers and renters fairly equally. While the job rate of 6.2 percent is lower than the countywide 9.4 percent, the average asking lease is a relative deal at$ 2.35 per square foot, compared with$ 2.65 for the San Diego area total. The area’s lease growth of 5 percent over the past year tops the regional rate of 2.7 percent. Still, those metrics have not made Old Town a magnet for home financiers, with its offer volume of $11.9 million for the previous 12 months down 40 percent from the previous year.
Workplace absorption for the past 12 months was an unfavorable 16,300 square feet. However, there are emerging indications that the submarket might attract more attention from office and other business designers in coming years. Nearby to Old Town, on the opposite side of I-5, the U.S. Navy has actually begun informal talks with the city to ultimately redevelop a big part
of the Navy’s Space and Naval Warfare Systems Command school with business components. In the neighboring Midway District, situated near the San Diego Sports Arena and Liberty Station, designer Hammer Ventures is in early preparation on a$ 325 million mixed-use job called The Point, to include residential and commercial aspects on the previous website of a U.S. Postal Service