Downtown 40-story apartment project changes course, will become condos

SAN DIEGO — An apartment complex being built in downtown San Diego is changing course nearly two years into its construction and will now become condos.

British Columbia-based developer Bosa Development submitted plans this week to change the 40-story apartment building into a 389-unit condominium tower. Bemi Jauhal, a vice president at Bosa, said the decision was made because the company believed condominiums would deliver a better return on investment than apartments and therefore saw the change as a good opportunity.

“There is a lack of condo supply” in downtown San Diego, she said.

Construction started on the project in 2022, and it remains a big hole in the ground at the moment. Work at the site, near the Symphony Towers building on B Street, has been paused for several months as Bosa applies for new permits.

The planned development is near the edge of East Village in an area made up largely of office buildings and apartments. With the exception of the El Cortez condo building two blocks away — condominiums are rare.

Brian Schoenfisch, deputy director of the city of San Diego’s Urban Division, said while much of the project has already been approved, there will still be additional permits needed for the build-out of the structure.

Beyond the existing big hole on the site, which will eventually be for underground parking, no actual structure has yet arisen. While the proposed change to condos may slow down completion of the project, securing required permits isn’t expected to take as long as it could have had the building already been partially constructed. Bosa could not provide a time estimate for when the project would be completed.

Changing a project this late in the game to condos is unusual, said Gary London, a San Diego real estate analyst. When a residential project is changed, it is usually the other way around — from condos to apartments. In 2010, the nearby Vantage Pointe building, also on B Street, was turned into apartments from condos after the developer failed to sell enough units during the Great Recession.

London said he didn’t have any insight into Bosa’s change of heart but said a case could likely be made that the rental market in that section of San Diego is nearing saturation. There are roughly 1,600 apartments opening in downtown this year, and the majority are in East Village.

East Village has been the epicenter for new apartment construction in San Diego County for the better part of a decade, and competition is fierce with many complexes offering move-in deals.

There are more than 7,000 apartments in East Village, said real estate tracker CoStar, with an 8.8 percent vacancy rate — the highest in San Diego County. There are still more apartments scheduled to open this year. The biggest are 800 Broadway, with 384 new apartments, and The Wyatt on 15th St., with, 368 apartments.

London said having properties for sale in that area would be a benefit to downtown because most condos are on the west side.

“It’d be really great to see for-sale product built on the east side,” he said.

Cary Lowe, a retired San Diego land-use lawyer and urban planner, said the change should be straightforward in one sense because the zoning for multi-family housing will not change. However, he said California laws can change quickly and result in more work for Bosa when it comes to submitting new plans for its condos, which sometimes have stricter requirements for things like sound-proofing, plumbing and electrical.

Lowe said what should make the legal process quicker is that the building is not constructed yet. Where the real headaches come is when an existing structure is being converted for a different use, he said.

Bosa only recently started building apartments after years of constructing condos. In the summer of 2021, the company opened the 617-unit Diega apartment tower at 702 Broadway. The building still has one of the higher vacancy rates in the region at 9.4 percent, said CoStar.

The company has developed numerous condo towers downtown, including Savina (2019), Pacific Gate (2018), Bayside (2009), Electra (2007), The Legend (2007), The Grande Santa Fe Place (2005), Park Place (2003), Discovery (2002) and Horizons (2001).

Bosa’s new condo tower will be bounded by B Street, Eighth Avenue, C Street and Ninth Avenue. Last year, the city announced plans to pay Bosa $23 million to build a park on a portion of the site. Bosa also must design the park, called North Central Square Park, so that could also add to the time before the building is completed.

The company did not have price estimates or other details about condo sizes yet.