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Bankers Hill enters new high-end housing boom

The Bankers Hill market west of Balboa Park -- one of San Diego's first high-end urban neighborhoods -- is entering a new era with luxury, multifamily infill development.

Encinitas-based Zephyr Partners is in escrow to purchase what once was the Sixth Avenue Medical Building at 2850 Sixth Ave. across from Balboa Park in the Bankers Hill area for an entitled 75-unit development (photo below).

Now occupied by the Urban Discovery Academy -- which will be relocated to a building being constructed at 14th and E streets on property owned by the San Diego Community College District -- the Bankers Hill site is being sold by Park Equity LLC, a subsidiary of 3D Investments of Beverly Hills.

While the amount of the purchase has not been disclosed, The CoStar Group (Nasdaq: CSGP) and a Colliers International flier said the property had been offered for sale for $12 million.

3D Investments, which got the entitlements, had been planning to develop the property when the recession hit and was never able to get it going.

"This will be a very exciting project," Victor Krebs of Colliers said. It will really complement what is already on Sixth Avenue."

Zephyr Partners is headed by Dane Chapin, also a co-founder of Health Savings Associates, and Brad Termini. While Chapin earlier told the Transcript he is in escrow to purchase 2850 Sixth Ave., he couldn't be reached for further comment.

Zephyr is also building three North County projects totaling 100 units. The largest of these is a 63-unit townhome development known as Level 15 in downtown Escondido.

The Bankers Hill market west of Balboa Park is the scene of several new multi-unit residential developments. One involves the lot on Sixth Avenue occupied by an office building that is currently in escrow. That site is entitled to a 75-unit luxury housing project.

The other developments are a 35-unit ocean view condominium development known as Summerhouse Carlsbad in the North County city, and a two-home project in the old part of Del Mar.

Krebs handled another notable Bankers Hill transaction recently. In late February he handled the sale of a 20,000-square-foot parcel of land at 2665 Fifth Ave. in the Bankers Hill neighborhood for $5.33 million.

The buyer was CR Fifth & Nutmeg LLC, a unit of downtown San Diego-based ColRich Communities, which is just about to start construction on 45 luxury condominiums over 7,500 square feet of retail.

The seller was a partnership of the Cathedral Church of St. Paul. The units will range from 1,400 to 2,200 square feet and will feature views of Balboa Park.

The church owns another adjacent parcel to its sanctuary that also has been zoned for some sort of residential development.

Alan Nevin -- economic and market research director of the XPera Group -- said given that the final approach for Lindbergh Field is a bit further south than Laurel Street, he doesn't understand why the Uptown Community Planning Group hasn't approved any buildings taller than 30 feet since the Park Laurel towers were completed in 2005. Those towers contain 350 residential apartment/condominiums.

As noted by Nevin, twin midrise residential towers are being planned at Sixth Avenue and Palm Street.

The Cushman family and Joseph D. Wong Architecture are planning the development at that location.

Meanwhile, Alliance Residential is part of the mix with its 100-unit midrise that is more than halfway through construction on Fourth Avenue at Thorne Street. Carrier-Johnson + Culture is the architect; the project is slated for completion by the middle of 2015.

Hammer Ventures -- which acquired the Laurel Bay property at Fifth and Laurel streets in 2004 -- has been redeveloping the old Blood Bank building on Upas Street near Fourth Avenue into 35 apartment units. Nevin said it looks like that project is finishing up.

The Mandarin House site at 2604 Fifth Ave. -- once considered as a possible site for an 80-room boutique hotel by the late architect Graham Downes -- is instead expected to be a 37-unit condominium property being developed by AJT Mandarin Investments, which paid $2.7 million for the restaurant building in spring 2013.

Bruce Leidenberger of La Jolla Pacific Development, who is acting a consultant on the project, said the development "will feature high-end condominiums."

"That project will start late spring or early summer of next year," Leidenberger said.

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