BOSA to replace Paladion site downtown with tech-friendly office
After sitting on a vacant property adjacent to Horton Plaza for five years, Bosa Development is now pushing forward with a plan to tear the existing structure down to its steel frame and erect a low-rise 162,000 square-foot Class A creative office building in its place.
The $30-million project, located at 777 Front Street and designed by Joseph Wong Design Associates, is described as a four-story, atrium-style space with floor-to-ceiling glass, a wealth of natural light, expansive floor plans up to 43,000 square feet in size, a fitness center, and a large courtyard ripe with seating, games and other amenities. An onsite parking structure includes around 240 spaces, or 1.5 spots for every 1,000 square feet
With interior demolition under way as of last week, Bosa expects to see commercial tenants in the new construction in a little over a year, though no leases have been signed yet.
“We believe the market is right,” said Nat Bosa, president of the Vancouver, Canada-based development firm. “The research shows that if you build it, they will come.”
They are the long sought after high-profile technology firms who have, according to downtown real-estate lore, circled the region with interest on occasion. These tech powerhouses have avoided establishing a substantial presence downtown, the thinking goes, because the office stock is older and bottled up in high-flying towers, which don’t allow for the contiguous, collaborative spaces they prefer.
His latest office development, then, hopes to satisfy what he characterizes as burgeoning demand for Class A creative space following a flurry of residential development in the area.
Downtown San Diego’s total office inventory is 9.8 million square feet with Class A vacancy, including available subleases, at 8.6 percent, according to data provided by Cushman & Wakefield.
Just west of the now-shuttered Nordstrom store at Horton Plaza, 777 Front Street is the site of the former Paladion retail center, initially constructed in 1992 and later replaced by a Class B office site. Bosa took ownership of the property in March of 2013 through an investment company.
At the time of the transaction, the assessed value of the building was $27 million, according to the county’s assessor’s office. Real estate research firm CoStar shows a 2013 sale price of $27 million and that the building has been vacant since May of that year.
The timing and location of the Bosa development may see it and its leasing agency, JLL, go head-to-head with the future owners of Horton Plaza in competition for premium office tenants. Stockdale Capital Partners is currently in escrow to purchase the 900,000-square-foot shopping center and aims to redevelop the site into an amenity-rich modern office campus with ground floor retail.
“More office downtown is great,” Bosa said. “It’s the right time. Rents are going up.”
While both Stockdale and Bosa have embraced an expected downtown employment surge, Bosa’s one-year timetable would mean that 777 Front Street opens first. However, the project has yet to secure approval from Civic San Diego, the city’s downtown planning agency.
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