Hillcrest, Mission Hills, and Bankers Hill Multifamily Development Report
This area is attractive to both investors and residents alike as it boasts a convenient location between various parks, neighborhoods, and freeway access in the San Diego metro. The various amenities in this submarket draw a variety of tenants, which creates a diverse demographic and bustling community. Increased demand within the market has prompted the rise of multifamily rents here, along with an inflow of proposed and in-progress developments as investors use the market’s growth for profit advantages.
Balboa Park’s Market Performance
As of now, Class B and C properties remain the least vacant segments in Balboa Park. Landlords here have stated that many households are choosing to lease dated apartments instead of renovated facilities. This is likely due to the high cost-of-living in all of California, leading residents to areas that offer lower rents.
Residents looking to live in the metro will find that many apartments are offering concessions. This will allow for the vacancy rate to decrease as residents take advantage of these options. North Park, Bankers Hill, and Hillcrest have the highest rents in the metro. Yet, rental growth rates here have outpaced the area over the past 12 months.
Balboa Park stands out for its increase in development as around 1,100 units opened during the past year. However, deliveries here have mostly been for properties that have fewer than 30 units. Most of the developed inventory has been for one-bedroom and studio apartments to fit the smaller properties that are most common in this area.
Together with the increase in development, Balboa Park has also seen an influx of investors. Institutional and REIT buyers now make up 10% of the market share here. The largest sale occurred in the first quarter of this year for a Class A property. The Element, located in Bankers Hill, sold for $15.9 million. This facility includes 28 units, with an asking rent of $3,823 per unit.
Properties Under Construction
Onyx on Park
This property won’t be complete until May 2025, but it will add to the supply of luxury-tier apartments in the submarket. Onyx on Park will include 61 units, which are a combination of one- and two-bedroom units. The Class A property is a six-story building that will deliver 55,000 square feet.
4th & Hawthorn
Looking ahead to October, this Class B apartment complex will be a new addition to the mid-tier properties in Balboa Park. This specific property is located in Bankers Hill, aiding residents in search of lower rents in this traditionally luxury-tier area. The make-up of this property will have 21 one-bedroom units and 22 two-bedroom units.
Treehouse
The Treehouse development will add to the luxury properties in Bankers Hill. Construction is already underway and the property is expected for delivery in 2025. The mix of units is undetermined, but it will bring 107 new units to the area.
The Kaya
The Kaya will be a 78-unit midrise apartment complex upon completion next year. It will be located in Uptown, and will attract residents with its proximity to areas like Little Italy, Hillcrest, and the Gaslamp District.
Park Summit
Construction began in May for this facility, which is scheduled for completion in 2026. It will be a 21-story, mixed-use property with 265 apartments. The building will include one- and two-bedroom units.
The Rainford Project
This development broke ground earlier this year, and is expected for completion in summer 2025. There will be nine stories at this facility, with a total of 102 units. Tenants in search of studios, one- and two-bedroom apartments may look to this luxury property in Mission Hills.
New Development By KLR Planning
A new property is under construction on the corner of Washington Street and 6th Ave. KLR Planning will deliver an 18-story apartment complex that is made up of 418 units. Tenants in search of lower rents may turn to this property as 47 of the units will be designated as affordable housing. . No estimated completion date has been determined or the name of the property.
The Quince
The Quince is a 260-unit multifamily high-rise in the heart of Bankers Hill, San Diego. The building is uniquely nestled into the northern-terminus of Maple Canyon as it winds through the hills just above the San Diego Bay. The project sits atop the highest point of Bankers Hill and overlooks San Diego’s only bridge that is also a historic landmark: The Quince Bridge. As such, it benefits from San Diego’s two most sought-after natural elements when it comes to living: Canyon and Ocean views.
The lower floors will benefit from an intimate connection with the canyon while the upper floors will have unobstructed 200-degree views of the ocean in perpetuity. The structure is also 2 blocks from Balboa Park, walkable to the San Diego Zoo, Little Italy, Downtown, Hillcrest, and a 10-minute drive to many of the amazing Southern California beaches. While it does benefit to being central to many of San Diego’s amenities, it is its connectivity to nature and integration into a unique topography that really makes it a truly unique building.
The Revel
Revel is a 435-unit development project located on 1.6 acres in San Diego’s Hillcrest neighborhood. The project will offer high-quality amenities, including a fitness center, co-working space, a clubroom/lounge, and a pool deck, as well as convenient access to Downtown San Diego, the San Diego Airport, and Balboa Park.
Hillcrest, San Diego
San Diego, CA – 301 Residential Units
Situated on the border of Hillcrest and Bankers Hill, FLATS Hillcrest is a ground-up construction project offering 301 residential units across studio, one-bedroom, and two-bedroom units. The development will deliver 9,000 square feet of best-in-class residential amenities, including a sunset deck offering breathtaking views of the San Diego bay and the downtown skyline.
8th Avenue Family Housing
8th Avenue Family Housing is an affordable housing project currently under construction in the vibrant neighborhood of Hillcrest. The project is specifically designed to accommodate families, including large families, and will provide a total of 80 units. Of these, 79 units will be reserved as general affordable housing units for low-income families, while one unit will serve as an on-site manager’s unit.
3625 India St.
UPTOWN: Building, Mechanical, Electrical, plumbing permit to construct a new 56-unit multi-family apartment building. Work to consist of a (5) levels residential, over (2) levels of parking, on an empty lot and the existing structure to be demo, under separate permit.
10th and Robinson Project
This 8-Story residential development, located in the desirable neighborhood of Hillcrest, will provide 69 much needed new apartments to the community. Nestled into a cul-de-sac with views in every direction, this 45,000 square foot building is carefully placed on a 7,385sf lot. Amenities include a ground level co-work lounge, a penthouse-level outdoor terrace, and ground level parking. The building is designed to maximize its potential while also fitting into the growing neighborhood. This development is designed as part of the Complete Communities Housing Solutions regulations and includes affordable housing. Completion date: 2025
8th & University
Located in the heart of Hillcrest near the corner of 8th and University, this 8-story mixed-use development will provide 90 new homes in a vibrant community. This infill project is thoughtfully placed on a 10,083 square foot site, with views and open space connecting to the park, the neighborhood, and the mountains beyond. Amenities include below grade parking, an inviting lobby, fitness room and spa-pool deck at the penthouse level. The penthouse level invites residents with a large mural and projection area. This development is designed as part of the Complete Communities Housing Solutions regulations and includes affordable housing. Completion date: 2024
Flora & Fauna
Urban in form with an organic at heart, Flora + Fauna brings nature home to nurture. Celebrating and honoring local, native, and eco inspired values, this new residence is a refreshing reminder that a life well lived is worth conserving and exploring. The property features 189 units, located in Bankers Hill.
Recent Developments in Hillcrest, Mission Hills, and Bankers Hill
Sasan Apartments
This seven-story mixed-use building was completed last year. It boasts 54 residential units and three commercial spaces. The development aims to appeal to the needs of a wide demographic of income ranges, with units set aside for tenants who are not on par with the area’s median income, or cannot qualify for low-income housing. This development will ultimately contribute to fixing the housing shortage currently observed within the Mission Hills submarket.
The Harvey
The Harvey was delivered by Foundation for Form last year. This Class C property is located in Hillcrest. There are 64 units that make up the facility, with a mix of studio and one-bedroom units.
EVOC Hillcrest
This 82-unit Class A property was delivered last year with the goal of affordable housing and a location within walking distance of shopping, dining, and entertainment. More than half of the units here are one-bedroom units, with only five two-bedroom units. The average asking rent per unit here is $2,815.
Denizen
The owner of the Denizen, Carmel Partners, took advantage of an abandoned restaurant in Hillcrest to open an 8-story multifamily property. The complex opened earlier this year with 151 units. Tenants can look to this Class A property for a mix of studio and one- and two-bedroom units.
Uptown Lofts
Uptown Lofts is a 23-unit mixed-use multifamily property that offers 815 square feet of ground floor retail space. The building opened this year, and it features studios, one-bedroom and two-bedroom units. With its close proximity to restaurants, night life, and transportation, the property appeals to the active lifestyle of the Hillcrest demographic.
4th & Laurel
The six-level property will include 36 units: 18 studios, two lofts, ten 1-bedroom / 1-bath units, and six 2-bedroom / 2-bath units. The total site area will be approximately 10,000 square feet. Amenities will include a rooftop deck, ocean, bay and park views, and so much more. The architecture firm for this project is Awbrey Cook Rogers McGill, recognized for creatively transforming client needs and aspirations into elegant and unique properties of lasting value.
The Nash
4135 Park Blvd | San Diego, CA – 194 Residential Units – Delivered in 2024
The Nash is located in an Opportunity Zone and resides at the intersection of the Hillcrest, University Heights, and North Park neighborhoods in San Diego. The project will contain 190 residential units, a coffee shop, a hospitality-inspired lobby with co-working space, as well as an outdoor pool with private cabanas and a top-floor skydeck.
Balboa Park Trends
Absorption has tallied roughly 720 units over the past 12 months, driven almost entirely by luxury inventory, and the vacancy rate has increased to 4.5%. A net of about 630 units have opened in the past year, which has placed upward pressure on vacancy. The vacancy rate is expected to be more volatile in the coming quarters, given the number of units under construction, 1,300. That is particularly true of 4 & 5 Star properties, where the vacancy rate is trending at 8.4% during the fourth quarter. Roughly 750 units are scheduled to open this year.
Households in lower-rated properties have faced more economic distress, and renters leaving the San Diego region for more cost-friendly cities have impacted backdoor demand. However, property managers have noted that renewals have begun stabilizing since 24Q3, which has help prevent vacancy from rising further in 2 and 3 Star properties.
Thousands of parcels have been upzoned here to spur multifamily housing development. Investors have purchased restaurants, churches, and office properties to redevelop into housing and mixed-use projects. Builders have also pivoted toward some larger projects in recent years, such as the 379-unit Winslow that opened in University Heights in 2023. These projects are juxtaposed against the smaller and older communities that dominate the landscape here.
Annual rent growth has historically trailed the broader San Diego region, and many landlords here have been more passive in operating their properties. Rent growth has measured -0.1% in the past 12 months, compared to an average of 2.4% between 2015 and 2019. Concessions have become more widely used in recent months to attract new renter households as competition between new and stabilized buildings has increased.
This is one of San Diego’s most dynamic neighborhoods, with strong demand drivers. Although completions have led to rising vacancy, the submarket should stabilize as those units fill. Even so, the present demand environment is likely to carry into 2025.
Source: CoStar
