Small Business a Lucrative Office Market

Urban West, a California developer specializing in new urban properties, is making its first foray into San Diego’s commercial real estate market with its eye on small businesses.

Partnered with the San Diego Smart Growth Fund, the company has acquired one of the last parcels in the master-planned community EastLake in Chula Vista.

East Lake Village Limited Edition, located at 2080 Otay Lakes Road, will be developed with 10 for-sale office buildings designed to meet the needs of growing small businesses.

The Smart Growth Fund is sponsored by the San Diego Capital Collaborative, formed by the San Diego City-County Reinvestment Task Force under the direction of county Supervisor Ron Roberts and City Councilman Tony Young, 4th District.

Capital is coming from the California Public Employees Retirement System, along with funds from Banks and insurance companies.

“We recognized an opportunity and the need,” David DiRienzo, Urban West president, said in a recent interview. “There is a need for more office space here, with the rise of entrepreneurship and small business growth. Technology is allowing more and more people to create their own businesses.”

Owning your own space, he said, has many benefits for small businesses, from tax breaks to greater control over their digs.

“They get their own corporate identity,” DiRienzo said. “When they’re leasing in a traditional office building, there is no way to get a signage opportunity. Here, with a small building, they can create a sign and an identity for the company, and customize space to meet their needs and the growth of the business.”

The product, priced in the low $300-per square-foot range, should have a “very strong market,” he said.

“We see continued growth in business, the economy is doing well, and, even with the rising interest rates, we also are watching a rise in rents,” DiRienzo said. “One offsets the other. We feel very bullish on the for-sale market.”

Urban West plans to finish the project by the first quarter of 2007, with sales beginning in June 2006.

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Mid-County Report:

Some 3 million square feet of new office space is under way in San Diego’s mid-county, with half of it already spoken for, according to Burnham Real Estate’s Mark Wayne of San Diego at a May 25 confab of the San Diego Chapter of the National Association of Industrial and Office Properties.

On May 25, Wayne moderated a panel discussion on trends and predictions for the mid-county market, which ranges from Del Mar to the north, Mission Valley to the south, the I-15 freeway to the east, and the Pacific Ocean to the west.

According to NAIOP, this market accounts for 60 percent of the county’s office space; 63 percent of the research and development space; and 26 percent of industrial space; while vacancies for office space stand at 8 percent, and just 4 percent for R