Irvine Company adding hundreds of apartments to University City office campus

Southern California real estate giant Irvine Company plans to raze two, 1980s-era office buildings to make room for hundreds of apartments and turn its University City office campus opposite a major mall into a mini neighborhood.

The company announced last month that it will redo the western portion of The Plaza campus fronting La Jolla Village Drive with two apartment buildings and 552 total units. The redevelopment is part of a broader planning effort designed to take advantage of the city’s updated community plan for University City, which creates room for more than 30,000 additional residential units.

Irvine Company expects to begin demolition of the low-rise buildings at 4320 and 4330 La Jolla Village Drive next spring. The real estate firm said construction of the new buildings will take three years to complete.

“Guided by the city’s vision and our experience creating world-class mixed-use districts, we have begun our master planning to create quality housing connected to office campuses, retail, transit and open spaces,” Rob Elliott, senior vice president of planning and design for Irvine Company, said in a statement. “The first project will be at The Plaza, adding convenient housing while also significantly investing in and reimagining the overall campus. The result will be a property that is even more desirable, drawing professionals and young workers to a true live, work and play city center.”

The Plaza is a 17-acre office campus with 850,000 square feet of space spread across low- and high-rise towers in a sprawling, parklike setting. The campus features a direct link to the MTS Executive Drive trolley station and a pedestrian bridge to Westfield UTC. It takes up most of the land within the superblock bounded by Executive Drive, Genesee Avenue, La Jolla Village Drive and Executive Way. The Plaza also includes the Red O restaurant.

Irvine Company purchased The Plaza in 2007 as part of 14-property portfolio transaction valued at more than $1 billion, according to real estate tracker CoStar.

The developer intends to replace the westernmost office buildings and their associated surface parking lots with two, seven-story apartment buildings on 4.5 acres of land.

The Plaza project features 552 mostly market-rate units ranging from studios to three-bedroom units. It includes 640 garage parking spaces alongside amenities such as a shared fitness center, co-working spaces and a pool area.

Irvine Company also plans to upgrade the campus’ central office amenity areas with additional public open spaces, new seating options, public Wi-Fi and a dog park for residents.

The company, through a spokesperson, declined to share the project cost. It also declined to provide specifics on the number of units it will set aside for low-income families, except to note that the company will follow the city’s inclusionary housing policy. The policy requires that developers either set aside 10% of total units, on or off site, for households earning 60% or less of the area median income. Alternatively, developers can pay a fee, based on project square footage, in lieu of building the units.

The Plaza project exemplifies Irvine Company’s new approach to its San Diego assets. The company has retreated almost entirely from downtown San Diego as it looks to invest into its University City holdings. In the La Jolla-adjacent submarket, Irvine Company owns 46 office buildings with a total of 4.5 million square feet of space spread across nine different campuses. The company also has four apartment communities with nearly 1,800 units in the area.

“They’ve made a decision that University City is their new downtown. They’ve abandoned downtown San Diego, and they’re all in on University City,” said Gary London, a principal of local firm London Moeder Advisors. “University City is the second largest office market in the region. It’s the most prosperous office market, and more importantly relative to employment, it’s a strategic location for all the new employment both in University City and Sorrento Mesa. So, essentially, what they’re doing is they’re capitalizing on what is now and will continue to be huge residential demand in this area and a huge supply deficiency.”

London, a local real estate expert who worked for a firm that helped plan hundreds of acres of land in the Golden Triangle area in the 1970s, said the location at La Jolla Village Drive and Genesee Avenue is the most strategic corner in San Diego right now.

“It’s Main (Street) and Main (Street),” he said. “It’s the perfect place to create a residentially dominated project.”

The Irvine Company redevelopment will likely serve as a catalyst for neighboring land owners to rethink their dated or low-rise buildings because the area lends itself to higher density, he said. Already, the new owner of the shuttered Costa Verde Center just west of Westfield UTC is working on a blueprint for the former strip mall that centers around creating a walkable neighborhood with thousands of residential units and neighborhood shops.

The Irvine Company project matches perfectly the intent of the new University City Community Plan, which was approved a year ago and went into effect on Dec. 1. The plan eyes population and employment growth through mixed-use, urban villages that take advantage of the new trolley line and other transit connections.

The community plan’s designated land use for The Plaza site is an urban employment village allowing up to 218 residential units per acre. As such, the community plan laid the regulatory foundation for Irvine Company to move forward with its project at The Plaza site by right, meaning the project does not require discretionary approvals.