Sounds of Softening

San Diego's condo building boom taking a much-needed respite

By Greg Aragon

Downtown San Diego is taking a break.

After three years of unprecedented growth in the condominium market, the oceanfront community is waiting for buyers to catch up.

"We had a boom of over three years," said Donna Alm, vice president of marketing and communications for CCDC, a non-profit corporation created by San Diego to staff and implement Downtown redevelopment projects and programs. "Now we are seeing a softening of the market and a stabilizing of demand."

Alm said that between 2003 and 2005, downtown San Diego added 4,298 new condos, with a record number of 2,000 units completed in 2004. In 2006, the 1,500-acre downtown added 900 new units.

She said since 2001, the condo explosion has increased downtown population from 15,000 to 35,000 people.

"Now the market is getting back to reality," said Douglas Wilson, chairman of San Diego-based Douglas Wilson Cos. "It was way too hot for a number of years."

He calls the 2006 slowdown a "normal correction," attributing it to things like investors leaving the market and high construction costs, which has stalled many projects.

"But I think by the end of 2007, there is not going to be much inventory around," said Wilson, whose company presently has about 1,300 units under construction or in the pipeline in and around the city.

Currently, downtown San Diego has 14 condo projects underway, which will add 1,200 units this year and about 1,100 in 2008.

Two of the most anticipated projects currently underway are The Mark and Aria.

Towering 33 stories and costing $155 million, The Mark will be the tallest building in East Village when complete in mid-April. It is developed by San Diego-based Douglas Wilson Cos. and was designed by Denver-based Shears Adkins Architects and Martinez + Cutri of San Diego. The general contractor is Greeley, Colorado-based Hensel Phelps.

The Mark is currently about 90 percent complete and 60 percent sold.

"There really is one word to describe The Mark -- contemporary," said Chris Shears, project designer. "It reflects its time; it is an ultra-modern, urban residence, not pretending to be anything else."

This modern motif is expressed by a $7 million full curtain wall system of metal and glass panels wrapping around the entire structure.

Located on Island Ave, between Eighth and Ninth avenues, The Mark will offer 229 one- and two-bedroom condominiums, 13 penthouses and 11 townhomes. Prices will range from the mid-$400,000's to more than $3 million. The project also features three levels of subterranean parking and 10,000 sq.-ft. of retail space.

Aria, atop Cortez Hill, is a 24-story tower developed by Anka Property Group of Australia. It was designed by San Diego-based Perkins & Co., and is being built by Denver-based PCL Construction.

"What is dramatic about Aria is its shape," said Dan Cichasky, PCL project manager. "It is not a typical box structure; it is very irregular."

He said the structure's triangular-sail shape will provide spectacular views of San Diego Bay, Balboa Park and downtown.

When complete in December, Aria will offer 137 one-, two- and three-bedroom condos ranging from $400,000 to $1.7 million. Highlights include Italian granite, floor-to-ceiling windows, swimming pool, fitness center, spa and four levels of parking.

Located on the corner of Ninth Avenue and Ash Street, Aria is currently about 60 percent complete, with work completed up to the 11th floor.

With The Mark and Aria completing this year, along with another 800 units, insiders can see a new wave coming.

"The market slowed in 2006," said Cichasky. "But this is just an adjustment in the cycle. I think the astute developer noticed this and is planning for 2008 and early 2009 to pick things back up."

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