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Little Italy’s next big office building will be across the street from its newest one

Doubling down on downtown San Diego, Kilroy Realty will pick up its second full-city block in Little Italy, paying $42 million to buy 2045 Pacific Highway where it plans to erect another office building across from its first full-block project in the neighborhood, 2100 Kettner.

The publicly traded real estate investment trust announced last week that it is in escrow on the site, which is just a surface parking lot away from San Diego Bay. The developer plans to convert the 1.3-acre lot, currently home to a Mobil gas station, into another marquee offering, this time building 275,000 square feet of tech-friendly office space in a five- or six-story tower with panoramic views.

The yet-to-be-named project is still in its infancy, meaning Kilroy must obtain permits and is likely still a few years away from breaking ground. An expected two-year construction period could see Kilroy complete the project in 2025 or 2026, said Peter Dowley, who is vice president of investments at Kilroy Realty Corporation.

“We’ve got a lot of confidence in the San Diego market as a whole, and especially in Little Italy,” Dowley said. “One of the things that really appeals to us about this site is its adjacency to 2100 Kettner.”

Based in Los Angeles, Kilroy’s portfolio includes 14.6 million square feet of mostly office and life science space. The West Coast firm just moved into the Austin, Texas market with a big-ticket purchase of the all-new, 36-story Indeed Tower for $580 million.

Locally, Kilroy is putting the finishing touches on 2100 Kettner, Little Italy’s largest office building to date and the firm’s first downtown. The six-story building has ground-floor retail spaces, a public courtyard, multiple terraces and a large rooftop deck — but so far, no tenants.

Kilroy is looking to build something similar across the street at 2045 Pacific Highway, Dowley said. That means the future office building will feature expansive and open floors geared around tech and media companies whose employees usually prefer to work in a collaborative fashion. It will also have ample outdoor space, unobstructed bay views from most floors and all the perks of the surrounding urban environment. The developer anticipates spending about the same on the project as it did on 2100 Kettner — or $140 million, he said.

Currently owned by Pacifica Companies, 2045 Pacific Highway is bounded by West Hawthorn Street to the north, West Grape Street to the south, Pacific Highway to the west and California Street to the east. The site, kitty-corner from 2100 Kettner, is subject to an 85-foot height limit and is in a zone that prohibits residential use, said Brad Richter, who heads the city’s Urban Division. Kilroy expects to close escrow before the end of the month.



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