The 140-acre Cantarini Ranch (CT 00-18, FEIR 02-02) subdivision was approved in 2004/05 by the City of Carlsbad for development of 105 half-acre lots with ~55 acres of natural “HMP” open space. The property’s higher elevation and gently rolling hills provide sweeping pastoral and blue-water vistas. This carefully planned neighborhood brings the rural-estate vision of Carlsbad’s Sunny Creek Specific Plan (SP 191) to life, with half-acre minimum lot sizes, over-sized front- and side-yard building set-backs, expansive open space and an extensive trail system.
The Zone 15 / Sunny Creek area, with Cantarini Ranch at the center, is an ~ 850-acre rural refuge bounded by the Agua Hedionda Creek riparian preserve on the west, large natural “HMP” open space preserves on the south and east, and College Blvd. (future) on the north. The Sunny Creek area represents the last large coastal development opportunity in north San Diego County.
Development of the Sunny Creek area will include construction of the last section of College Blvd. (“Reach A”), which will provide residents with convenient access to Carlsbad’s pristine beaches, high-wage employers and a wide array of superior quality public services and amenities, including abundant parks & hiking trails, world class golf, resorts, restaurants, breweries, shopping, live entertainment and Palomar Airport.
We expect 2024 will be more of what we saw in 2023 - planning and positioning. Ledcor’s purchase of the former Walmart site has raised the question of how many units the City will allow before requiring the last section of College Blvd., “Reach A”, to be completed. The site size (~17 acres) and legislative push by the State for higher densities seem to favor a multi-family development (for-sale and for-rent) of 400-500 units, or even more if contiguous acreage and “affordable density bonuses” are included.
Given the traffic service failures and increasing safety hazards on El Camino Real and Cannon Road, it’s tough to imagine the City allowing more traffic to be generated by new development projects before the solution to current and future traffic problems and hazards, i.e. College Blvd. “Reach A”, is built.
At the northerly end of “Reach A”, is the 150+ unit Encinas Creek Apartments project that has encountered and endured more challenges than most humans should be expected to handle…their persistence is admirable and they might be “done” with the planning, design and entitlements in 2024.
More broadly, the shortage of housing and relative success of the new home market, despite the extraordinary headwinds of high mortgage rates and lower affordability, has home-builders desperate for well-located land. Find a better location than Zone 15.
It’s interesting how “impossible projects” become possible, when there are no easier or comparable alternatives.
The big story for 2023 was the resilience of the U.S. housing market. Despite conditions that most economists predicted would cause home price declines of 10% or more, home prices recorded another year of increase. Homebuilders kept inventories low and effectively mitigated the mortgage rate shock with buy-downs and incentives. While sales volume was down, the market remained healthy due to severely limited inventory of both new and re-sale homes.
For 2024, whether you’re in the “soft-landing” or “recession” camp, the housing market, while helped by falling mortgage rates, may face challenges from slowing economic growth and job losses during the second half of the year. Ironically, a softer housing market presents better opportunities for financially prudent land purchases that allow time to secure entitlements.
At the macro level (U.S., not necessarily Carlsbad) much of the Commercial Real Estate Market is in recession. Over $1Trillion in debt is coming due over the next 18 months and values for office are down as much as 40%. NOI is falling, and lenders want more equity. Accordingly, “jingle mail” is making a come-back.
Even multi-family, a highly favored asset class during the last decade, faces challenges associated with distressed debt and an excess quantity of new unit deliveries over the next 18 months. Nevertheless, the challenges for multi-family are easily solved with time, whereas the substantial decline in office demand portends a longer, and more painful, solution. For the rest of CRE, industrial is mostly okay and retail is the star performer, for now.
With respect to the stock market, unless you’re a really good stock picker, these lofty valuations coupled with the intense level of trader exhuberance seems like a good argument for shifting into Treasuries.
The information and images presented on this web site are for general information purposes only. While we believe the information provided is accurate, we do not guarantee it. Please direct inquiries and comments to: David Bentley, President - Bentley Equity, Inc. - 760-809-5216 - email@example.com. For information regarding the developer of the Zone 15 projects described herein, visit our web-site: www.dmbentley.com.