The recently renovated Tower 180 office complex at 180 Broadway Ave. has a new owner that plans to spend $140 million to convert the downtown San Diego property into a hotel and residential property, while maintaining the existing ground-floor shops.
Last month, San Diego-based hotel developer J Street Space purchased the 386,000 square-foot office property, which includes a 25-story skyscraper and a contiguous eight-story annex, as well as a parking garage. The developer bought the complex, under the entity T180 SD Owner LLC, from Hammer Ventures for $61 million, property record records show.
J Street Space, which also developed the boutique Moxy hotel in downtown San Diego, said it plans to turn Tower 180’s lower-level office floors into hotel rooms and remake the top floors as residences, but is still determining the exact mix of units. The developer is also contemplating adding a rooftop pool and bar, and anticipates reopening in 2027, said President Saj Hansji. San Diego-based firm Delawie is the project architect.
“(The Tower 180 purchase) was a unique opportunity to bring new hotel and residential units into the market with speed and well below total replacement cost, in a great location downtown,” Hansji told the Union-Tribune via email. “It is a unique challenge combining several years of various related experience.”
Started as J Street Hospitality, Inc. in 2011, the real estate developer specializes in ground-up hotel construction and hospitality projects in the downtown market, including The Courtyard Gaslamp, Hotel Z and the Residence Inn Gaslamp. The firm is also currently erecting the Bower Hotel in place of the former Villa Capri motel across the street from the Hotel del Coronado.
Although the company isn’t ready to discuss its specific plan for Tower 180, the developer has telegraphed a desire to divide the property in two and focus exclusively on the hotel conversion of the 25-story tower. J Street Space’s preliminary review application, submitted to the city in November, is centered around the feasibility of separating the skyscraper from the annex, which are connected and share building systems. The idea is to turn the taller tower into a hotel with 450 rooms and sell the annex, the developer’s engineering firm said in a letter attached to the preliminary review application.
The project will only require ministerial permits, meaning those that are by right and not subject to discretionary review, said Brian Schoenfisch, who runs the city of San Diego’s Urban Division.
“Downtown’s zoning code provides for great flexibility to allow for the conversion of office buildings to other uses, including hotel and residential uses,” he said. “Having such flexibility as by-right and incentive-based zoning has been an important factor in downtown San Diego’s post-pandemic recovery.”
Tower 180’s change in use is a marked departure for a complex that just a few years ago was completely refashioned with an all-new, distinctive glass facade and interior upgrades meant to give the 61-year-old facility fresh appeal to modern office tenants.
Previous owner Hammer Ventures purchased the property at First Avenue and Broadway, formerly known as the Executive Complex, in June 2016 for $54.4 million and spent untold millions on the makeover. At the time, the privately held real estate investment firm took out an $82 million loan to finance the acquisition and renovations, according to property records.
Although the renovation work wrapped up in 2020, the bulk of the building’s office space stayed vacant, said Joshua Ohl, who is the San Diego director of market analytics for CoStar. There was 340,000 square feet of space available for lease at the time of the sale, he said.
Tower 180 does have a handful of retail tenants, including Mendocino Farms, Blue Bottle Coffee and Anytime Fitness, which will remain at the property, the developer said.
The conversion effort comes as downtown office availability hovers around 38 percent, when counting space available for sublet and projects still under construction, according to CoStar data. What’s more, between 700,000 square feet and 800,000 square feet of office space that has been renovated over the past five years is still on the market, Ohl said.
The excess inventory is a product of a post-pandemic, tepid return-to-work environment coupled with a downtown building boom. The market dynamics make it difficult for older towers, even freshly renovated ones, to attract tenants that are likely getting rent concessions from landlords trying to fill newer space, Ohl said.
“I think at this point, it’s a one-off (office conversion). It’s hard to say if it’s going to create a trend,” Ohl said. “I think (there is) going to be a piecemeal approach to the individual properties that might be targeted for such conversion opportunities, simply because some properties are not going to be able to financially pencil out.”
Meanwhile, La Jolla-based Reven Capital is still working through the logistics of whether the city’s long-vacant 101 Ash St. office tower, just three blocks north of Tower 180, can be converted to a residential building. The developer, which has brought on affordable housing developer Lincoln Avenue Communities as a partner, is still in preliminary talks with the city on a development deal. The parties will likely enter into an exclusive negotiating agreement later this month, said Jay Goldstone, who is a special adviser to San Diego Mayor Todd Gloria.
