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New Project Adds to Crowded Apartment Slate in Downtown San Diego

Jefferson Makers Quarter is Latest Project in Bustling East Village
September 13, 2018

Developer JPI’s Jefferson Makers Quarter in East Village is among several apartment projects now planned or underway in downtown San Diego.
Rendering credit: JPI, Civic San Diego

Texas developer JPI wants to build a 318-unit apartment complex in downtown San Diego's East Village that is already the region’s most active area for new multifamily projects - and becoming increasingly competitive.

City officials are reviewing plans for the seven-story project known as Jefferson Makers Quarter that would occupy a full city block - bounded by Broadway, 15th, 16th and E streets - and add 318 residences with 12,000 square feet of ground-floor shops and restaurants.

Developers did not immediately return requests for comment on expected buildout costs and other details.

It is the latest in a string of apartments, offices, restaurants and other elements completed or in the works at the five-block Makers Quarter, a mixed-use community being master-planned by developers Lankford & Associates, HP Investors and Hensel Phelps.

Most recently, that project saw the arrival of Spaces, a coworking brand of International Workplace Group, which leased more than half of the space in the complex's newly completed Block D office building.

Thanks in part to a nationwide push in recent years toward walk-friendly, urban-core markets, downtown San Diego is now by far the region’s most active submarket for new projects, especially apartments, with East Village the epicenter for much of the recent activity.

While no construction timetable has been set for JPI’s development, its units could arrive into a downtown apartment market that’s seeing increased competition for tenants, as more than 2,000 new units have come online during the past year.

A recent analysis by CoStar Market Analytics noted that downtown rent growth has been slowing over the past two years, with vacancy rates expected to remain elevated for the foreseeable future as the growing supply outpaces demand. Based on projects currently in progress, CoStar analysts project the current supply wave could last at least into 2020, with nearly 2,900 market-rate units under construction as of August 2018.

The latest data from Civic San Diego, the city’s downtown project oversight agency, showed that downtown had an additional 4,144 apartments approved and pending construction as of July 2018. Projects that would add another 2,192 apartments have been submitted to the city and are pending approval.

Since 2001, developers have completed projects that delivered more than 9,300 apartments to the downtown market, according to Civic San Diego.

Headquartered in Irving, Texas, the 40-year-old JPI, originally known as Jefferson Properties Inc., has a Western regional office in San Diego, where it currently has under construction another apartment project known as Jefferson Pacific Beach.

The nationwide developer has been particularly active in the Anaheim market, where it recently opened one apartment building and has three others under construction in that city’s Platinum Triangle district.

Officials estimate the Jefferson Makers Quarter project would generate about 339 construction jobs and 57 permanent jobs.

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