Merge 56 Shopping Plaza Delayed

The Merge 56 Shopping Plaza has been a topic of anticipation for both new and long-standing residents of Rancho Penasquitos for over a decade. Despite the prolonged wait, the development of the plaza has seen several revisions in its planning stages. Recently, developers appeared to have finalized a design, shifting away from the initial concept of a conventional big-box shopping center—originally envisioned to include:

  • Large Grocery Store
  • Movie Theatre
  • Large Fitness Center

The revised plan scales down these ambitions, centering on:

  • A Boutique Hotel
  • Two Anchor Restaurants
  • Fast Casual Dining Options & Coffee Shop
  • Boutique Fitness

Additionally, the development is set to feature three Research & Development buildings managed by Alexandria Real Estate Equities, a REIT specializing in properties for the life science and technology sectors.

So the big question everyone seems to be asking, despite completing the grading for the site over a year ago, why hasn’t construction begun on the project? The primary delay appears to be due to Alexandria’s strategic planning. The company aims to erect three Research & Development buildings on the premises but is currently biding its time. With commercial vacancy rates in San Diego on the rise and high interest rates adding to the hesitancy, Alexandria seems to be waiting for a more opportune moment to proceed. As it stands now, construction of the center might be delayed by an additional two to three years.

In the interim, there are eight Office/Retail spaces situated across from the anticipated plaza for lease. Currently, three are occupied—a Barber Shop, a Leasing Office for the nearby Townhomes, and our office, OFF THE 56 Home Team. There is also news of a Wine Tasting shop set to open soon, and there are plans to fill one of the vacant spaces with a Coffee Shop in the future. Many residents who have moved into the Townhomes & the Arlo Single Family homes did so with the expectation of having a town center within walking distance. This is still the hope but it seems they may have to wait a bit longer for this vision to become a reality.

There are also a few other developments in the vicinity. The Preserve by Cisterra is located at the Western end of Camino Del Sur at Merge Avenue. The area has been graded for building, but I would not be surprised to also see it sit idle for a few years while waiting for the building and demand environment to change.

Developer Keith Rhodes owns a number of the remaining parcels in the area, which were zoned for mainly residential 52 single family homes and a 3.5 acre passive park. Rhodes wants to change the project’s zoning to include a 511 unit, 7 story apartment building with no park. Most residents in the area are against this plan and the hopes are to keep the original zoning in place, but the City of San Diego is really pushing more housing units. It’s anyone’s guess what will happen.

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