Inside Block D: Downtown’s distinctive new office development
Small though it may be, the brand new 60,000-square-foot office development in East Village’s Makers Quarter is envisioned as the harbinger of a commercial real-estate renaissance that will draw corporate elites and create more jobs for downtown’s booming residential population.
That’s a lot to ask of a low-rise building with modestly sized 75-foot-wide floors.
But the project, known as Block D, aims to elevate itself into the upper echelon of modern work spaces with distinctive features such as automated exterior blinds on each floor that combat glare on demand. The 26 motorized, glass garage doors, spread purposefully throughout the property, also supply fresh air when needed.
And generously sized outdoor spaces, along with open-air staircases on the north and south sides of the building, should entice workers to venture outside when taking breaks or moving between floors.
Technophiles will appreciate the building’s connectivity features. Everything, including the aforementioned blinds and garage doors, can be monitored and adjusted through an online dashboard. Plus, environmentalists can take comfort knowing that Block D is intended to be a “perfect” building, meaning it should generate enough power from its double-sided solar panels to sustain itself.
“It’s not too much of a stretch to say that Block D is a really critical part of the Makers Quarter planning process,” said Mark Cafferty, president and CEO of the San Diego Regional Economic Development Corp.
Makers Quarter, a makeover of the Jerome’s Furniture family property holdings, is south of City College and bounded by Broadway and G Street and 14th and 17th streets. Developed by Lankford & Associates, Hensel Phelps and HP Investors, it was master-planned to include around 1 million square feet of office space, roughly 140,000 square feet of retail and 800-plus housing units.
Much of the East Village community is still theoretical, with Block D the face of Makers Quarter’s broader office vision. It joins Punch Bowl Social, 10 Barrel Brewing and the 265-unit residential development Broadstone Makers Quarter as concrete examples that a grander plan is in play — if demand warrants.
When it comes to office development, that’s not exactly a given, though, according to Jason Hughes, chairman and chief executive of commercial leasing firm Hughes Marino.
“It’s just the Wild West out there,” he said, characterizing the East Village blocks as a “no-man’s land” with minimal amenities, prevalent homelessness and rents too high for corporate clients.
Block D, for its part, is already 70 percent leased. Spaces, the cooler co-working offshoot of shared office space giant Regus, has inked a deal to occupy 33,806 square feet — or three full floors.
The digital design agency Basic was first to lease space, paying $3.40 a square foot for the fifth floor. With its custom interior buildout underway, Basic will be the building’s first official tenant, taking residency the week of Oct. 1.
Two ground-floor retail spaces and the 10,364-square-foot sixth floor have yet to be leased.
“(Block D) is being well-received,” Cafferty said, calling the project a success. “The tenants are an interesting mix of people you want to see down there.”
Even still, Mary Pampuch, executive vice president for building developer Lankford, said that the quarter’s overall office component is being downsized a bit — from 1 million square feet to closer to 800,000 square feet — after community planners struggled to secure a large anchor tenant. So instead of something big, the Makers Quarter group is moving forward with another small project. It expects to break ground on a 50,000-square-foot office project next summer. The other 700,000-square-feet of planned office is still several years off.
“We were out campaigning for a 200,000-square-foot office building and it was very difficult,” she said, explaining that it was hard to sell the neighborhood before the entertainment or food and beverage venues had opened their doors. “There’s a lot more interest now than there was a year ago.”
A lot more competition is also on the horizon.
“There’s 1.5 million square feet of office coming online in the next 24 months,” Hughes said. “Between (The Campus at Horton), the Paladion site, Tower 180 and the Thomas Jefferson School of Law, there’s a crazy amount of space coming available soon.”
Most experts agree that newer creative office stock is needed in the region to keep pace with a growing population of tech workers who, they say, live downtown but commute north. Even Pampuch welcomes real-estate investment firm Stockdale Capital Partners and its grandiose plan to turn the 900,000-square-foot Horton Plaza mall into an office epicenter where big Bay Area technology firms can congregate.
“The bigger the employment base we can get down here, the better,” she said.
For now, though, Block D is a bit of an outlier.