With $330 million in the bank, Horton Plaza owner ready to overhaul empty mall

Previously on hiatus, the first phase of the mall-to-office-campus conversion project is now fully funded and on track for completion in early 2022


Downtown’s retail ghost town is on the cusp of construction activity with Horton Plaza’s owner now financially equipped to convert the property into a mixed-use office campus for elite tech tenants.

Los Angeles-based Stockdale Capital Partners, which purchased the property in 2018, said this week that it has closed a $330 million construction loan, meaning the first phase of the redevelopment project is fully funded on track for completion in early 2022.

The latest capital infusion is comprised of a group of funds managed by investment services firm AllianceBernstein. It puts Stockdale’s phase-one project cost at more than $500 million when including the $175 million the developer spent to buy the site from Westfield.

“Three hundred thirty million dollars is a lot of money,” said Dan Michaels, who is managing director of the real estate investment firm. “(The loan) shows the extreme amount of confidence that best-in-class lenders like Alliance have in the downtown San Diego market.”

Known as the Campus at Horton, the high-profile conversion project calls for a bulk of the 10-block property, or 772,000 square feet, to be remade into office space for tech firms and as many as 4,000 of their workers. Another 300,000 square feet will be reserved for ground-floor retail tenants that cater to workers’ needs and appetites. The remade facility will feature an abundance of natural light, solar panels on most rooftops, a blackwater recycling system and a carbon-neutral design.

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Although the campus project was approved by San Diego’s City Council in May, it met with legal pushback from long-time mall tenant Macy’s. In October, the retailer filed suit to stop the project, with the threat jeopardizing Stockdale’s ability to secure financing. The firms settled their dispute in January and Macy’s agreed to vacate the mall this month.

With money in the bank, Stockdale will soon erect a perimeter fence and begin exterior construction, while also preserving visitor access to Jimbo’s Naturally and 24 Hour Fitness. The firm anticipates that 600 to 800 construction workers will be on-site, and that the campus’ office and retail spaces will be ready for tenant improvements in around 18 months.

No tenants have been announced, but Michaels said that his discussions with big-name, out-of-town firms have intensified since the loan was secured.

Next up, the real estate investment company will also need to finalize the terms of a lease to operate and redo the city’s adjacent Horton Plaza Park. The contract requires City Council approval.