Campus at Horton Faces Foreclosure as Downtown San Diego Project Hits Major Setback
Campus at Horton Faces Foreclosure as Downtown San Diego Project Hits Major Setback
The ambitious redevelopment of downtown San Diego's former Horton Plaza mall has hit a severe financial crisis, with the property now facing foreclosure over $351.2 million in unpaid debt. Developer Stockdale Capital Partners received a notice of default on February 6 from Luxembourg-based AllianceBernstein, giving the firm until May 7 to resolve the default before the property potentially heads to auction.
The foreclosure notice comes at a critical juncture for the massive project, which aimed to transform the iconic 1980s-era shopping center into a modern mixed-use campus with 772,000 square feet of office space and 300,000 square feet of retail. Despite securing several high-profile retail tenants including Sprouts Farmers Market, Shake Shack, and Sweetgreen, the development has struggled to attract office and life science tenants to its newly renovated spaces.
The project's challenges were compounded when the City of San Diego, which had been in advanced negotiations to purchase much of the property's office space for a new City Hall complex, abandoned those plans in late 2024 due to budget constraints.
The development, which spans seven city blocks in the heart of downtown, has been further complicated by mechanics liens filed by contractors and subcontractors seeking payment for construction work performed between April 2024 and January 2025.
"This is the inevitable result of a failed commercial office market. Timing is everything. And the developers of Horton and their lenders are victims of very bad timing," said Gary London, a principal at local real estate firm London Moeder Advisors. London emphasized the property's crucial role in downtown's vitality, noting, "Downtown really can't thrive again without a resuscitated Horton Plaza. It is the historical anchor."
Stockdale Capital Partners purchased the property in 2018 for $175 million and secured a $330 million construction loan in March 2020, which was later increased to $398.5 million. The loan came due in July 2024. The developer has invested significantly in modernizing the property, incorporating specialized building systems for research and constructing a speculative wet lab to attract life science companies.
The property's future remains uncertain, though real estate experts suggest potential outcomes could include a negotiated forbearance, a short sale, or acquisition by a new developer. The situation represents one of the most significant commercial real estate challenges facing San Diego in 2025, with implications for the broader downtown revival efforts.
Campus at Horton in foreclosure – San Diego Union-Tribune
The lender behind developer Stockdale Capital Partners’ Campus at Horton conversion project in the heart of downtown San Diego has started the foreclosure process to recoup $351.2 million in unpaid debt.
On Feb. 6, Beacon Default Management, Inc., acting as trustee for Luxembourg-based investment company AllianceBernstein, recorded a notice of default and election to sell under deed of trust for 324 Horton Plaza with the County Recorder’s Office, property records show.
The action gives the borrower until May 7 to get back into good standing before a notice of sale is published and the property is sold at auction or returned to the lender.
“The notice of default, when filed, commenced a non-judicial foreclosure of the property. Unless Stockdale pays the extraordinarily large default within 90 days, the lender will record and publish a notice of trustee’s sale for at least 21 days before a final foreclosure sale,” said Gordon Gerson, whose commercial real estate law firm, Gerson Law, represents financial institutions.
“A forbearance, or temporary halt of the foreclosure process, may be negotiated between now and the date of foreclosure. In some instances a short sale combined with a discounted pay-off is within the universe of possibilities,” he said. “The $351.2 million question is: Will the lender discount what is owed? No matter the case, because of the character of the property, a potential buyer and future use of the property may be one of the biggest issues for 2025 in San Diego real estate.”
The foreclosure comes just weeks after the Union-Tribune reported that the property is encumbered by mechanics liens, which were recorded by contractors and subcontractors seeking millions for unpaid construction work from April 2024 through January 2025.
Stockdale declined to comment for this story.
The Campus at Horton is the reincarnation of Horton Plaza, the 1980s-era, post-modern mall famous for helping to revitalize downtown. The property consists of seven blocks between First and Fourth avenues, starting with Horton Plaza Park along Broadway to the north and cascading south to G Street.
In August 2018, Los Angeles-based real estate investment firm Stockdale Capital Partners purchased the retail center for $175 million. The following year, the developer was granted approval to convert the mall into a mixed-use campus with 772,000 square feet of office space and 300,000 square feet of retail. The firm has also promised a second phase of development that would introduce more than 800 apartments in two, new skyscrapers at the site.
To fund the project, Stockdale took out a $330 million construction loan from AllianceBernstein in March 2020. The loan amount was later increased to $398.5 million with a balance due date of July 10, 2024, according to the notice of default.
As of Jan. 27, Stockdale owed its lender $351.2 million, not including default interest and late fees, the filing states.
The Campus at Horton project was initially pitched as a bet on out-of-town technology giants setting up shop in downtown San Diego, but Stockdale later sought to attract life science companies. To that end, the developer incorporated specialized building systems for research. It also built a speculative wet lab on the second floor of its marquee building — building 100, or the former Nordstrom store — on G Street.
Nearing completion, the conversion project has no announced office or life science tenants. Stockdale had, until late last year, been in advanced talks with the city of San Diego. The city was negotiating a deal to buy a bulk of the property’s office space to replace its aging City Hall complex. However, San Diego Mayor Todd Gloria abandoned plans for a new City Hall in light of the city’s substantial structural budget deficit and a failed sales tax measure.
The developer has had better luck with retail tenants, and said recently that it intends to open shops and restaurants in the fall.
At the same time, little work has been done on the adjacent Horton Plaza Park, which is owned by the city but leased to the developer. The developer must complete the urban park space on Broadway before the end of year if it wants to remain in good standing with the city.
“This is the inevitable result of a failed commercial office market. Timing is everything. And the developers of Horton and their lenders are victims of very bad timing,” said real estate analyst Gary London, a principal of local firm London Moeder Advisors. “Someone will inevitably profit from the redevelopment of Horton Plaza. I expect that it won’t be this developer. This would be the perfect time for the city to negotiate an offer to lease and eventually purchase (the Campus at Horton).”
The Campus at Horton is just one of several downtown office properties felled by high vacancy, low lease rates and pandemic-fueled changes to how companies operate. However, the property’s significance — given its size, location and history — might be unmatched.
“Downtown really can’t thrive again without a resuscitated Horton Plaza. It is the historical anchor,” London said. “This is a tragedy of the legacy of urban renaissance downtown.”
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Originally Published:
Stockdale Capital Partners' Campus at Horton announces inaugural tenants
LOS ANGELES – August 23, 2023 – Stockdale Capital Partners (“Stockdale”), a Los Angeles-based,
vertically-integrated real estate investment firm, announced its inaugural tenants at its
Downtown San Diego newly-renovated Campus at Horton, anchored by Sprouts Farmers Market,
as well as Shake Shack, Salon Republic, Sweetgreen, and Studio Three Fitness.
“After several years of hard work, we are excited to announce these best-in-class retailers for our
tenants and the community. The interest in Downtown San Diego remains as strong as ever and
we remain committed to delivering a thriving mixed-use experience that provides a preeminent retail
offering, top-tier life science labs and highly-amenitized office” said Daniel Michaels, Managing
Partner of Stockdale Capital Partners. “Horton is woven into the fabric of the San Diego community
and deserves to be a shining beacon to everything great about this city. We have more tenants to
announce shortly that will only add to these fantastic names.”
“These tenants recognize that Horton’s proximity to Downtown’s favorable demographics,
densifying residential community and overall demand for a curated retail hub make it an ideal
location for ensuring their success,” said Jeff Bhathal, Managing Director of Stockdale. “This initial
tenant mix makes it absolutely clear: this activation of new retail offerings in the Downtown San
Diego market is here and is long overdue.”
Since acquiring the formerly-named Horton Plaza in 2018, Stockdale Capital Partners has created
one of the largest adaptive re-use projects on the West Coast and shown its commitment to the
seven city block, 10-acre site by making major investments in the property to offer a one-of-a-kind
urban mixed use innovation campus.
Campus at Horton’s major improvements include:
- Development of a 10-story life sciences tower at the site of the former Nordstrom
- Conversion of former Mervyn’s to a 5-story mixed-use office tower
- New retail offerings focused on experiential retail, dining, fitness, health & wellness and entertainment
- Updated building facades and building infrastructure throughout the site
- Improved circulation featuring enhanced connectivity to project’s 2,200-stall parking structure
- LEED Platinum design including an onsite micro-grid that will generate approximately 2 MW of solar power
- WELL Platinum design creating a distinctive and health-focused work environment for
employees and visitors to the project - Incorporating patios, lush landscaping, expanded outdoor seating and dining spaces
throughout the project - Developing a 1.25-acre activated green space for communal gathering with best-in-class food offerings at Horton Plaza Park
Stockdale Capital Partners continues active lease negotiations with a large number of prospective
retail, office and life science tenants. In addition, the project is scheduled to deliver approximately
70,000 square feet of speculative life sciences space including office and wet labs in the fourth
quarter 2023. Campus at Horton is anticipated to create 4,000 jobs and have a $1.8 billion dollar
impact to the regional economy.
rdc - Campus at Horton, re-imagining the space as a mixed-use office and retail | The Plan
Horton Plaza seeks to take advantage of its downtown location and adjacency to the famous Gaslamp District by re-imagining the campus as a mixed-use office and retail development that will cater to technology and creative companies. The new Campus at Horton is envisioned with one million square feet of office space for the technology industries, retaining 300,000 square feet of retail and entertainment space. Designs take into account ideologies on the modern workspace, which includes a large number of amenities, flexible spaces for both private and group spaces, large floor plates, and converting all former retail spaces into landscaped, public walkways both for tenants and the general public.
The removal of the many bridges that crisscrossed the retail concourse created excellent visibility into and through the project which will enhance the retailers’ ability to draw street-level activity through the center. A new beer garden and food hall will enrich and reinvigorate the public park that was created from a former mall anchor location. Food festivals, music and performing arts are all integrated into the programming of the park space. Sited adjacent to the Gaslamp Quarter, San Diego’s most popular entertainment district, the new Campus at Horton is an anchor for the food & beverage offerings in the Gaslamp as well as a draw for conventioneers and the millions of seasonal visitors to San Diego’s famous waterfront.
Sustainability has been an important goal for the campus. With a previous life as an iconic mall, we are reusing as much of the existing structure and materials as possible. This effort of reused materials led to a 60% reduction in embodied carbon footprint. Yes, we even ground up existing walkways and then poured new ones using the same aggregate. Additional efforts include largest adaptive reuse in San Diego, Carbon neutrality, Pioneering water stewardship, Net zero energy offices, Future proof, LEED Platinum* live, work, play campus, Well Platinum, Wired score Platinum, and 3-star Fitwell. Awards: Gold Nugget Award of Merit for Best Reimagined Retail Space & a Silver Award in the Evolving Innovation & Aspiration category at the ICSC Global Design and Development Awards.
The adaptation of Campus at Horton redefines this once-heralded urban mall with 1,000,000 sf of tech-focused office space, retaining 300,000 sf for retail and entertainment. The new design considers ideologies of the modern workspace, which include generous amenities, flexible spaces, large floor plates, and ample landscaped, public walkways that connect the site to the city around it, repairing the urban fabric. The planning calls for ample, convenient on-site parking, covered spaces, and valet services for tenants and guests. Vertical construction suits tech and life-science firms, and accordingly the Nordstrom Building is expanding by five stories, adding new views of the City of San Diego and out to the horizon. Additional features include a food hall, roof garden, and an event stage. The design emphasizes environmental sustainability by reusing existing materials, reducing the project's carbon footprint by 60%, and incorporating an innovative black water reuse system. This adaptation marks San Diego's largest reuse project, aiming for carbon neutrality and water stewardship. The campus targets net-zero energy, future-proofing its infrastructure. Designed for LEED Platinum certification, this new place prioritizes wellness and connectivity aiming for high scores in Wired and Fitwell ratings.
“Instead of knocking down buildings and starting from dirt, they kept Horton Plaza, original footprint, it was really about taking a product that had been on the market for a very long time and really transforming it without tearing it down and leveling it, incorporating timeless architecture.”
Credits
San Diego
California, USA
Stockdale Capital Partners
Mixed-use Center, Retail, Office, Community Hub
09/2025
92903 sq. m
Confidential
RDC
RDC, Rios
Turner Construction
Graphic Designer: Sixteen-Fifty, Lighting Designer: Kaplan Gehring McCarroll, Landscape Architect: RIOS
Stockdale Capital Partners
Curriculum
Founded in 1979, RDC is a full-service, award-winning architecture firm dedicated to making everyday places extraordinary. Headquartered in Long Beach, CA, we are a 160+ team with offices in Los Angeles, San Diego, Washington D.C., and Arkansas.
https://www.youtube.com/watch?...
Sprouts, Shake Shack Among Anchor Tenants for SD's Campus at Horton - Connect CRE
Stockdale Capital Partners, a Los Angeles-based real estate investment firm, announced its inaugural tenants at its newly renovated Campus at Horton in downtown San Diego. It will be anchored by Sprouts Farmers Market, as well as Shake Shack, Salon Republic, Sweetgreen and Studio Three Fitness.
“Horton is woven into the fabric of the San Diego community and deserves to be a shining beacon to everything great about this city,” said Daniel Michaels, managing partner of Stockdale. “We have more tenants to announce shortly that will only add to these fantastic names.”
Since acquiring the formerly-named Horton Plaza in 2018, Stockdale has created one of the largest adaptive re-use projects on the West Coast. It has shown its commitment to the seven-city block, 10-acre site by making major investments in the property.
Connect Orange County will take place Sept. 27, 2023 at VEA | Newport Beach Marriott in Newport Beach, concurrently with Connect Healthcare Real Estate on Sept. 27 and 28. Click here to register for Connect Orange County, and here to register for Connect Healthcare Real Estate.
Inside The Story
About Paul Bubny
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).
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Glendale Office Tower Trades to Pendulum and Landrock
Newmark arranged the sale of 505 N. Brand Blvd., a 329,431-square-foot, recently renovated Class A office tower located in Glendale. The property sold for an undisclosed amount.
Co-Head of U.S. Capital Markets Kevin Shannon, Vice Chairmen Ken White, Rob Hannan, Michael Moll and Laura Stumm, Executive Vice Chairman Kevin Donner, Managing Director Ben Lushing and Director Alex Beaton represented the undisclosed seller.
The buyer is a partnership between Landrock LP and Pendulum Property Partners. Newmark Co-President, Global Debt & Structured Finance Jonathan Firestone, Vice Chairman Blake Thompson and Director Henry Cassiday led market financing alternatives throughout the sales process.
“Pendulum and Landrock’s acquisition represents a broader trend of institutional operators and capital re-entering the office sector for best-in-class product,” said Shannon. “There is more conviction that 2025 office product will be a good vintage, similar to 2009.”
Read More News Stories About: Newmark
Inside The Story
About Paul Bubny
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 16-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism. In this capacity, he oversees daily operations while also reporting on both local/regional markets and national trends, covering individual transactions across all property types, as well as delving into broader subject matter. He produces 7-10 daily news stories per day and works with the Connect team and clients to develop longer-form content, ranging from Q&As to thought-leadership pieces. Prior to joining Connect, Paul was Managing Editor for both Real Estate Forum and GlobeSt.com at American Lawyer Media, where he oversaw operations at both publications while also producing daily news and feature-length articles. His tenure in B2B publishing stretches back into the print era, and he has served as Editor in Chief on four national trade publications. Since 1999, Paul has volunteered as the newsletter editor of passenger rail advocacy groups (one national, one local).
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