SDSU Mission Valley: University selects developer to build 600 apartments at market price

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San Diego State University is laying the groundwork to add hundreds of homes to its Mission Valley campus, steps from the recently completed Snapdragon Stadium.

On Tuesday, the university announced that it had selected publicly traded real estate investment trust AvalonBay Communities to build the first residential units at the Mission Valley site. The 600-unit apartment project comprises 30,000 square feet of retail space on two plots just east of the newly erected stadium which are currently used for game day parking.

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Arlington, Virginia-based AvalonBay currently owns, directly or indirectly, 299 apartment communities with 89,037 total units in the United States, and was selected following a competitive bidding process. The multi-family housing developer, which has nearly $20 billion in assets, is currently negotiating the terms of a ground lease with the school. Terms of the agreement were not disclosed, but the contract is expected to be reviewed by the California State University board of trustees next year.

AvalonBay’s plan calls for a mix of market-priced apartments ranging from studios to three-bedroom units, an amenity deck, 1,000 parking spaces, restaurants and a grocery store. Construction is expected to begin in 2024, with units expected to be available in phases from 2026.

The apartment project will not only set the tone for private development on the sprawling 135-acre San Diego State property, but also – due to its location facing the property’s main street – will help define the entire site.

“Housing is a critical part of what will make SDSU Mission Valley a vibrant community of living learning,” Adela de la Torre, school president, said in a statement. “It’s essential to innovation. It is essential to achieve a sense of connection and belonging. I couldn’t be more excited to begin building this next phase and working with AvalonBay to make it a reality.

In August 2020, SDSU purchased the city’s former Mission Valley Stadium site along Friars Road for a satellite campus. The school, which paid $88 million for the property, has so far erected a $310 million mixed-use stadium, which is now home to the Aztecs soccer team, the women’s professional soccer club in the San Diego Wave FC and San Diego Legion Rugby Team.

The entire campus project, known as SDSU Mission Valley, requires 4,600 residential units, 80 acres of parks and open space, 1.6 million square feet of office and research space, 400 hotel rooms and 95,000 square feet of on-campus retail. A 34-acre city-owned river park is expected to be completed by the end of 2023.

SDSU Mission Valley’s first residential project will be located on a 4.24-acre site just east of Snapdragon Dragon, across from Innovation Way. The site is part of the current Orange car park, which will remain operational as a car park until construction of the project begins.

(Courtesy of San Diego State University)

With the price just announced, AvalonBay will bring to life 13% of the total number of housing units in the planned community. The apartment community, which takes over part of the current Orange car park, will consist of one building with four separate interconnected building areas separated by a series of courtyards and outdoor spaces. The eight-story building includes five floors of residential units on three levels of above-ground parking. There is also an underground parking level.

“We envision an inspiring new mixed-use community that will create a better way to live in Mission Valley,” AvalonBay executive Mark Janda said in a statement. “The new community will incorporate a range of design features that will promote walkability and connectivity throughout the surrounding neighborhood, all within a highly sustainable mixed-use building.”

The average asking rent in Mission Valley, across all room types, is $3,187, according to the date of the CoStar real estate tracker. Mission Valley’s rental market is comprised mostly of one- and two-bedroom units, which have asking rents of $2,880 and $3,402, respectively, according to CoStar.

AvalonBay was one of three finalists competing for the SDSU Mission Valley project site at market rate. The developer was selected based on a variety of factors, including the strength of its financial plan, said Gina Jacobs, who is an SDSU executive who manages campus development. The developer’s annual ground lease payments will be used to repay $350 million of bond debt issued for the purchase of the Mission Valley property and initial site development work.

The state of San Diego is in the midst of a separate process, working to select its first affordable housing builder early next year for the block just east of the AvalonBay project site, Jacobs said. The school is required to set aside 10% of total units, or 460 units, for low-income families or those earning 60% or less of the region’s median income.

UT reporter Phillip Molnar contributed to this story.

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