The Continental apartments in Little Italy are small and offer few amenities. That means cheaper rent, say developers
Little Italy’s newest apartment building bets people would live in a smaller place for the chance to be a cool neighborhood.
The Continental on West Cedar Street is made up of 42 studios that average 380 square feet and start at $1,550 a month — nearly $1,300 cheaper than the average monthly asking rent in Little Italy.
There are also five penthouses in the building, averaging 500 square feet, that range from $2,300 to $2,995. It is still near the Little Italy average asking rent of $2,847 in the second quarter, said real estate tracker CoStar.
The project is the vision of father-son duo Jonathan and Matthew Segal, who designed and developed the building together. The concept: Renters would be willing to reside in a smaller place, and forgo a parking spot, pool, gym and other perks to live in the popular neighborhood at a less expensive rate.
Proposed in 2016 with no parking, the developers ran into opposition at the downtown planning agency Civic San Diego and from some neighbors. The fight over parking — centered around the constant lack of spots in Little Italy — was one of the last before parking requirements were greatly relaxed at the start of this year.
“We’ve always been ahead of the curve,” Jonathan Segal said.
Still, the fight over parking led the Segals to construct eight underground spots (most going to penthouses), which they said added $1 million to the project and required rents to go up higher than originally planned.
The Continental is rare among new downtown developments that have tried to one up each other with amenities. For instance, the new Park 12 building in East Village includes two dog walking areas, two pools, sundeck with a hot tub, indoor and outdoor gyms, three clubhouses and an outdoor kitchen.
There is already early evidence that people might care more about a cheaper rent rate. Twenty leases have been signed at The Continental in two weeks of opening.
Living in a highly walkable, hip neighborhood is the main perk, but there are other amenities. All units come with a balcony and there is a 600-square-foot open air deck on the eighth floor with views out to the San Diego Bay. To cut down on space in the apartments, washing and drying units are in a separate room on the eighth floor.
The size of studios among new Little Italy complexes aren’t significantly bigger than the micro units of The Continental. The average studio size at AV8 on Kettner Boulevard is 578 square feet (average monthly asking rent of $2,240); at Amo on West Date Street, 405 square feet (average rent of $2,277); at Broadstone Little Italy, 630 square feet (average rent of $2,640); and Eighteen Ten State Street, 553 square feet (average rent of $2,305).
A 2016 survey from the National Multifamily Housing Council reported San Diegans put a high value on being able to walk places, which is seen as one of Little Italy’s selling points. In the ideal situation, 75 percent of renters said being within walking distance of a grocery store was preferred. Other important walkable destinations were a restaurant (61 percent), work (34 percent), bar (28 percent), public transit (27 percent) and schools (22 percent).
The answers were similar to the national responses but San Diego County renters ended up putting a higher value on being within walking distance of grocery stores, restaurants and schools than the national average.
Matthew Segal said they anticipated the target renters would be millennials but are seeing a range of renters in their early 20s to late 50s signing leases.
“It’s much more diverse than I expected,” he said.
The Continental, at the corner of Cedar and Union streets, was built on a 5,000 square foot site that was once the location of a former bail bond business with a massage parlor above. It is an imposing structure, with exposed concrete and could be considered an example of brutalist architecture. There are five subsidized apartments in the complex.
The Segals won’t be far away. The southeast corner of the building is a 2,900 square foot, five-story home Matthew Segal designed and will live in with his wife.
There is around 2,500 square feet at the ground floor of the building. One of the businesses will be run by April Segal, Matthew Segal’s wife, who will run a holistic pharmacy. Remedy Holistic Pharmacy’s space was also designed by Matthew Segal.