UCSD Buys Apartments in New Student Housing Tack

A sprawling new apartment complex in La Jolla’s Golden Triangle has been bought for graduate and married student housing by UC San Diego in what campus officials say could become the preferred way to meet the university’s housing crunch.

Escrow closed last month on UCSD’s $29-million purchase of the 381-unit La Jolla Del Sol apartments on Regents Road, a short distance east across Interstate 5 from the La Jolla campus. The first students already have begun moving in and UCSD planners expect the 38-building development to fill up by year’s end, given the long waiting list of students wanting campus housing.

UCSD currently houses about 31% of its student body on campus, but wants to increase that to between 40% and 50%. The university can only guarantee room in undergraduate dormitories to freshmen, and has an active waiting list of more than 560 people for married and graduate student housing.

“There’s been a trend toward more students wanting to live in campus housing,” Steve Relyea, vice chancellor for business affairs, said in an interview, citing as a major reason the lack of affordable rentals for many students in the La Jolla area. “And traditionally, we have responded to that by going through (the mechanisms) for new on-campus housing, the whole process from planning to completion, which can take anywhere from four to five years.

‘Quite a Lag Time’

“That’s quite a lag time given our large increases in enrollment and demand for campus housing.” Undergraduate housing now under construction on the campus was first planned five years ago, he said.

As a result, UCSD officials late last year decided to find out whether any housing was available near the campus and suitable for student use. They identified La Jolla Del Sol through a commercial broker and reached agreement in April with the builder, The Luckey Co. of Stockton.

“I can’t say for certain yet whether this is a trend that will lead to additional purchases,” Relyea said. “Since we just acquired it, we’ll evaluate cost of upkeep and other things to see how it all works out. If it really looks good and successful, we may well replicate the action.” Until that assessment is made, UCSD will undertake no planning for new on-campus housing construction. Officials say that the purchase is the largest private housing transaction of its kind by a UC campus.

Robert Fitzgerald, investment salesman for Coldwell Banker Commercial Real Estate Services in San Diego, said UCSD asked for appropriate housing within a five-mile radius, and for a new or almost-new complex so that as few people as possible would be displaced.

“La Jolla Del Sol was the perfect match,” Fitzgerald said, echoing a statement by Relyea that “no other project even came close to fitting the bill: to being large enough to offer economies of scale for management, to being almost new, and to being close enough to campus to be a short bus or bike ride away.”

The complex was completed in two phases, with part of the project opening last January and the remaining portion in May. It consists of 150 one-bedroom, one-bath units; 76 two-bedroom, one-bath units; and 155 two-bedroom, two-bath units. There are also recreation and various service facilities.

20% Occupied

Because of its newness, only about 20% of the units--with about 75 tenants--were occupied at the time of sale, either on month-to-month or six-month lease agreements. Those people now living at La Jolla Del Sol will be able to break their leases without penalty by UCSD if they choose to do so, Relyea said, or remain until the lease ends with the university honoring the agreement. Some may also be able to stay beyond their lease expiration on a monthly basis until the university needs the additional units this fall.

“We are committed to keeping this a very nice complex and I don’t think people will be able to tell the difference (between a private complex and university housing),” Relyea said, emphasizing that UCSD wants to be a “good neighbor” in the upscale Golden Triangle area with its numerous condominium and apartment projects that surround La Jolla Del Sol.

Partly in recognition of that responsibility, Relyea said, the complex will not be available to undergraduates, who often are harder on rental housing than older students. Also, Relyea said the university’s greatest immediate need is to reduce the backlog of graduate and married students wanting facilities.

“For this housing, the rents will be higher than for those on campus, which reflect the fact that this is much nicer than (typical) university-built housing and the fact that we have land costs involved here,” Relyea said. “But the rents will be significantly lower than what is available (privately) in the community because we don’t have profit margins.”

A consultant to The Luckey Co. said that the La Jolla Del Sol project was the only one the company had in San Diego County.

“Because of the new tax laws, holding on to the property just wouldn’t have gotten us the value we thought we would get when we started the project,” Robert A. Miller Jr. said. “There are a lot of competitors in the (Golden Triangle) area who are trying to lease 2,000 to 3,000 units. Although we were at par with our competitors who hold property in the (adjacent) La Jolla Colony development, the competition is very tough there. It was in our interest to sell when the university said they wanted to buy the project.”

Some Disappointments

The only disappointments over the deal are from some of the tenants who moved in beginning in January, expecting to remain in their desirable location far longer than now possible.

“I signed the lease on May 20 and moved in on June 1,” said Mary Lupher, who came to San Diego from Houston. “I found out about the sale from neighbors while we were sitting in the Jacuzzi. No one told me about this when I was being shown the apartments.”

Tom Huppert runs competitively and moved to the area because the hilly terrain is good for training. “Just as I was signing the lease I found out that the place had been sold to UCSD,” he said. “I was shocked at first, and scared that I was going to get kicked out, but I was told I can stay an additional six months. UCSD has been pretty pleasant about the whole thing.”

But Kent DeRosa said he has filed a small claims action against The Luckey Co. for allegedly withholding information about the sale when he signed his lease on May 28. “If I had known that it was going to become a dorm, I would have never moved” from the Mirada, another apartment complex just across the street, he said. “I moved because of the tennis courts. When you’re 50 years old, you don’t want to live in a dorm.”