The RiverView Professional Center, Santee's first Class A office project, is set to be completed next month with six free-standing, divisible office buildings, ranging from 6,875 square feet up to 13,575 square feet. The 63,500-square-foot project is phase two of the five-phase RiverView at Santee, being developed by Ryan Cos.. The third phase, including a movie theater and condos, has been temporarily put on hold.
Once completed, RiverView will be a mixed-use, 1.9-million-square-foot park designed for technology, research and development, and professional office use. It is part of the 700-acre Santee Town Center planned along the San Diego River.
Although four of the six phase-two buildings were reportedly reserved in July, only one building was still on reserve as of early August, and another reservation was expected soon, said Matthew Reid, vice president of Ryan Cos.
"We are qualifying buyers. We want to be sure they are what Santee wants, so we're kind of particular about who would reserve them," Reid said. "For example, one was an investor, and we don't want an investor in our park because they're competing against us."
One building was divided into smaller office condos for doctors, dentists and CPAs to buy, said Matt Pourcho, an associate of CB Richard Ellis who is on the marketing team for the project. Ron Bement and Chris Pascale of CB Richard Ellis are also in charge of marketing for RiverView.
The new office buildings were built according to standards set by the U.S. Green Building Council's Leadership in Energy and Environmental Design (LEED) program, which is the nationally accepted benchmark for the design, construction and operation of high-performance buildings. Reid said this is a major plus for potential buyers.
"Our phase two buildings beat Title 24 by 20 percent, so eventually our users will see a 20 percent savings in their utility bills. Those are real dollars, and in this day and age when rents and plans continue to go up, users need to find ways they're going to save money, and one of those ways is through more efficient building," Reid said. "We believe this is a tidal wave that will hit the Southern California area in the next five years, and we'd like to think we're ahead of that game."
Some examples of the environmentally efficient aspects of the RiverView offices are dual-pane glass windows to keep out the heat and make the cooling systems work more effectively; water-saving appliances such as low-flow toilets, waterless urinals and regulated faucets; and photo-cells on the roofs that SDG&E rents to feed energy back into its power grid. The landscaping and architecture of RiverView also highlight nature, with bike racks, walking pathways, natural stone and tile features, and fountains.
The office buildings, which will sell for $250 to $285 per square foot, may also have an ideal location at the intersection of where SR-52 and SR-125 will cross if they are extended. Pourcho said the boom in nearby retail and residential development will also make RiverView successful.
"All the retail was put in about four or five years ago, led by Home Depot and many other big chains, but there was no commercial or office space to support this," Pourcho said. "Now, especially with all the new residential that's coming to Santee, it's really needed. There are 1,400 new homes to the north of our site that are going in, so it's just going to fuel the commerce and economy of Santee commercial space, and that's why we're speculating buyers will come and buy them."
Negotiations are currently underway for every building, though none of them have been pre-sold.
Pourcho also said the for-sale-only offices are "a unique chance for people renting in East County or Mission Valley, where most of our activity is coming from, to actually own instead of rent."
The RiverView Professional Center will also bring many jobs into Santee, and Ryan Cos. hopes this will be the main draw for buyers.
"Santee's vision for the park is creating jobs, and creating an environment where citizens of Santee don't have to commute out of Santee to work," Reid said. "The work force of San Diego is supplemented by the citizens of Santee, and once users realize that and start to understand how far their people have to travel to get to work, they will become more sensitive to moving the headquarters out there. And we've also seen, with studies, that people are often willing to take a pay cut if they don't have to travel so far. So Santee's day is coming, for users to recognize, and we'll be ready for them."
The offices will be finished as "cold shells" in the beginning of September, and the buyers will have the flexibility to finish the inside of the offices to their liking with tenant improvements before they take ownership.
As phase two finishes up, Reid said the company hopes to begin construction for phase three in the spring of 2008, which would bring a 40,000-square-foot movie theater and 240 condos to the park. So far, however, Ryan Cos. has run into some obstacles.
"Market conditions right now are not ideal for residential, so we continue to see that sliding," Reid said. "And the movie theater: It's a very complicated and difficult project to try to get funded ... We're hopeful, but we've got a long road to go."
Phases four and five will consist of build-to-suit office buildings, depending on user interest in the park. Pourcho also said negotiations are still underway with a "well-known user" that may want to build an office in Santee. Phase one, a 77,000-square-foot build-to-suit office for The Hartford Financial Services (NYSE: HIG), was completed successfully in 2003.
"It's important to illustrate that we're establishing a market, building a new Class A environment that East County has never had. It's a chance for job growth and tax-benefits for owners," Pourcho said. "There's no other new Class A office space like this, where you can just walk across the street to so many amenities: the 24-hour fitness and food court. You're surrounded by amenities, nice water features, landscaping. This is usually something you see in La Jolla, so it's pretty unique."