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Plans for two San Diego mall redevelopments have taken a sharp turn, hinting at challenges for the office and life sciences projects.
At the Campus at Horton, Stockdale Capital Partners' plan to turn the mall into office space for life sciences and tech tenants with updated retail faces a major hurdle. A lender filed a notice of default with San Diego County to foreclose on a construction loan with a balance of $351M for the former Westfield Horton Plaza mall on the site. The project is still under construction in Downtown San Diego, according to CoStar. Stockdale invested $550M in the project, CoStar reported.
A Stockdale representative didn't immediately respond to a request for comment from Bisnow.
Another redevelopment project, a planned revamp of the Costa Verde Center near University Town Center, sold for slightly less than seller Alexandria Real Estate Equities paid. The life sciences real estate powerhouse had planned to build a campus on the property. It sold the site to a local development team for $124M, $1M less than it paid in 2022.
The new grant deed at the property includes a restriction barring the owner from using any part of the property for life sciences, The San Diego Union-Tribune reported.
Alexandria didn't immediately respond to a request for comment.
Office vacancy in San Diego was approximately 14.2% in the fourth quarter, according to a Colliers report. No new supply came online in that period. That report estimated that the more than 200K SF of office space in the Campus at Horton would come online in the first quarter of this year.
There was about 6.9M SF of available life sciences space in San Diego at the end of 2024, Commercial Observer reported. Triple-net rents were pushed slightly down to $5.95 per SF. The fourth quarter was the 10th quarter in a row of declining rent prices in San Diego, CO reported.
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