Top 5 San Diego Submarkets for Construction Activity

Here's a breakdown of the metro's top submarkets with the largest number of units underway as of April, based on Yardi Matrix data.

Despite the ongoing health crisis, development activity in San Diego has been moving forward as officials have taken measures and passed two key policy changes in order to keep construction going. In addition to implementing strict safety guidelines on construction sites, the city expanded the digital permitting process to include all types of permits as of early May. The platform had already been available for certain types of permits pre-COVID-19.

As of April, 9,202 units were underway in San Diego, according to Yardi Matrix data. More than half of the development pipeline is scheduled for delivery by year-end. Here’s a breakdown of the top submarkets for development activity in the metro, based on Yardi Matrix data.

5. Del Mar

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Following a year with no new deliveries, Del Mar kicked off 2020 with a total of 608 units underway. The submarket’s delivery cycle peak of 484 apartments was recorded in 2015.

As of April, one community was underway in Del Mar at 3200 Paseo Village Way. Kilroy Realty broke ground on One Paseo, a 23-acre mixed-use development, in early 2017 after nearly a decade of planning, costly setbacks and intense negotiations. One Paseo’s residential component is set to include 61 affordable units. The development will also feature 286,000 square feet of office space. The first phases of One Paseo delivered late last year—96,000 square feet of retail space and an initial 237 apartments came online.

4. Vista

With moderate construction activity in previous years, the submarket had a total of 691 units underway as of April. That’s a major jump from the 137 units delivered in 2015; that number is also the submarket’s completion total over the past five years. Of the five projects under development, the largest is the 305-unit Persea. The project received construction financing in 2018, with HFF securing $54 million for the developer, a joint venture between LLJ Ventures and Orion Pacific. The garden-style community is scheduled for delivery in late 2020.

The only fully affordable development underway in Vista is Wakeland Housing & Development’s 81-unit project dubbed The Grove. Situated at 815 Civic Center Drive in downtown Vista, the community is intended for low-income seniors age 62 and older and is slated for delivery later this year.

3. Sweetwater

Development activity has been consistent in the submarket, with an average of 277 units delivered each year over the second half of the decade. As of April, three projects totaling 822 units were underway in Sweetwater, a new cycle high, and 54 percent of those are scheduled to come online by year-end.

One of the largest developments in the submarket is Trammell Crow Residential’s 253-unit Alexan Rivue, which is part of Millenia, a 210-acre, master-planned development. Following the completion of its first community within the multi-phase urban village, Trammell Crow kicked off construction of the project with the help of a $50 million loan provided by Bank of America. Leasing at the luxury community began in late 2019, with completion scheduled for this summer.

2. Kearny Mesa

With 2,554 units under construction as of April, the submarket accounts for nearly 30 percent of San Diego’s total development pipeline. This marks a new cycle high, exceeding 2016’s completions, when a total of 972 units came online. Two projects are scheduled for delivery in 2020—the 248-unit Vive on the Park Phase II and the 306-unit Stylus and Siena.

The largest development underway is Town & Country, Holland Partner Group and North America Sekisui House’s redevelopment of Town & Country San Diego, a 40-acre urban resort hotel and conference center. The partnership acquired a 10.1-acre site in 2018 for the construction of 840 units across four buildings, centered around the new Town & Country hotel, which is undergoing a $90 million renovation. The residential component is expected to deliver in mid-2021.

1. Central San Diego

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Following a strong 2019 when 2,106 apartments came online, Central San Diego had 2,653 units underway as of April. A total of 1,903 apartments, or 72 percent of the total pipeline, are expected to come online later this year.

The largest development underway in the submarket is Bosa Development’s 617-unit The Block. The $200 million project takes up a full city block and consists of two buildings—a 41-story tower, one of the tallest residential high-rises downtown, and a 21-story tower. The buildings are connected by a six-level podium. The project includes 19,000 square feet of retail and 743 parking spaces. Scheduled for completion in late 2020, The Block is Bosa Development’s first rental project in San Diego.

Yardi Matrix covers all multifamily properties of 50+ units in size across 133 markets in the United States. This ranking reflects deliveries of properties within that sample group.