Living High on the High-Rise
The Strategy: Maximize Downtown Real Estate
Article From Business 2.0
Two years ago a one-block section of San Diego’s Marina District was nothing but a mud pit — the start of a planned 39-story, 222-unit downtown residential tower called Grande at Santa Fe Place. Yet even before the pile drivers arrived, the building had sold out. Of the last units to sell, the cheapest — two-bedroom homes on the 10th floor — went for about $800,000 apiece.
Downtown “revitalization” in big cities is decades-old news. But in San Diego, it’s luring an astonishing number of car-loving Californians out of the suburbs for a simple reason: Investing in a downtown condo there has become a very smart play. In the past five years, developers have built and sold 4,000 downtown residential units, and 9,000 more are under way. Downtown home values, meanwhile, have shot up an estimated 18 percent. “I bought my unit two years ago for $494,000,” says one real estate broker. “Last week someone offered me $1.2 million.”
What’s behind the boom? It isn’t just Petco Park, the waterfront stadium for the San Diego Padres that opened in 2004. Many believe it’s the savvy of Nat Bosa, founder of Bosa Development — the developer of the Grande and now San Diego’s biggest builder.
Bosa first gained renown for helping to lead a makeover of downtown Vancouver, British Columbia, more than a decade ago. At a time when city officials there were desperate for new housing in a 50-mile-wide urban area, Bosa, an Italian immigrant who entered the building trade 40 years ago as a carpenter, was among those who foresaw that Canadians would pay good money to live and own downtown. With flight capital flowing from Hong Kong, downtown Vancouver roared back with high-rise condos and parks. Within seven years, Bosa and other investors had built a miniature Manhattan.
When all the cheap land in Vancouver was gone, Bosa looked south and saw another sparsely populated, decrepit downtown in San Diego. Like Vancouver, the city had a beautiful bay to the west and miles of traffic-choked sprawl in every other direction. “It was lacking one big thing,” Bosa says. “More people downtown. There was too much vacant land for a downtown.”
When San Diego’s Centre City Development Corp. asked for proposals to build on downtown land in early 1998 — nine months before voters approved public financing for the ballpark — Bosa was at the front of the line. “I’ve never seen a developer like him,” says Walter Rask, San Diego’s former downtown planning director. “His architect would say, ‘Couldn’t we get an exemption on this or that?’ He’d tell the architect to shut up. He just wanted to know what the rules were — no matter how good or bad they were — and get moving.”
Today Bosa Development has about 2,000 downtown units either completed or ready for construction, more than twice as many as its two closest rivals, Intergulf Development Group and Intracorp San Diego. All have been at least 90 percent sold out prior to completion, says Alan Nevin, director of research at San Diego’s MarketPointe Realty Advisors.
With the best San Diego land spoken for, Bosa is opportunity-shopping up the coast. In Irvine he has begun construction on two 18-story condo towers with 232 apartments — the first such buildings in this sprawling suburban area. Is a Bosa three-peat possible? The early numbers don’t yet rule it out. Says Bosa, “We were 80 percent sold just coming out of the ground.” — M.S.