101 Ash Street Moves Closer to a New Purpose: 252 Permanently Affordable Downtown Homes
For years, 101 Ash Street represented a difficult chapter in downtown San Diego real estate. Now, its next chapter is taking shape. The City of San Diego is refining the agreement that would convert the former office tower into an affordable apartment community, and the latest changes point toward a more durable, better defined path to closing. The project, now referenced as 107 Ash Street by its development entity, would create 252 apartments and protect their affordability for the full life of the lease.
The amended agreement does more than adjust the paperwork. It adds five years to the existing 60-year ground lease, raising the term to 65 years, and requires the homes to remain deed-restricted as affordable throughout that entire period. The developer also added two apartments to the plan. In a downtown market where housing supply is essential to restoring street activity, supporting local businesses, and creating a more active neighborhood beyond office hours, every additional home matters.
The financing picture has become more concrete as well. A $6 million loan commitment from the San Diego Foundation helps the development team address a prior funding gap. The updated plan identifies a $73 million HUD-insured permanent loan as the largest financing source, alongside $70.8 million in tax-credit equity, $24.5 million in historic tax-credit equity, and a $4.4 million developer loan. Updated development costs are estimated at $209.1 million. Including the city note as an acquisition cost, the total project cost is $254.7 million, or slightly above $1 million per apartment.
That is a large commitment, but it reflects the difficulty and importance of adapting an existing high-rise into safe, code-compliant housing in the urban core. It also illustrates a key real estate truth: turning an underperforming building into homes can require patience, layered financing, and a clear long-term vision. The city’s compensation is projected to rise to $145.1 million under the amendment, nearly $55 million above the original deal, while the agreement brings a notoriously troubled property closer to becoming a productive community asset.
For San Diego buyers and sellers, the broader message is encouraging. Downtown’s recovery will not rest on a single project, but adaptive reuse projects like this can strengthen the foundation for a more balanced, lived-in urban neighborhood. More housing can support retail, restaurants, transit, and the kind of daily vitality that makes downtown more attractive to future residents. Buyers who are considering the urban core should watch these long-range investments closely, while sellers can recognize that meaningful neighborhood improvements often take time to show up in market perception.
The 101 Ash Street conversion is a constructive example of San Diego choosing forward motion over leaving a major building stuck in the past. As the deal advances, it has the potential to deliver housing, certainty, and renewed momentum to one of the city’s most important districts. If you want help understanding how downtown development may shape your next real estate move, connect with our team for local insight tailored to your goals.
Read the original article: https://www.sandiegouniontribune.com/2026/08/28/san-diego-tweaks-101-ash-st-deal-ahead-of-closing/