53rd Floor Designer Show Homes at One Rincon Hill: Fancy, Frivolous, For Sale!

If you want to see how a bland builder box can be transformed into a comfortable custom condominium, you should pay a visit to One Rincon Hill and drop 20 clams on a ticket to the "Design Above All" show homes. The designers started with the standard floor plans and finishes in the four units on the 53rd floor and created bespoke interiors for each; tailored to four imaginary clients with different tastes and priorities.

Some designers tweaked the floor plans slightly to improve flow or change the use of a room, while others took it further and painted the kitchen and bath cabinetry and replaced the the standard granite counter tops with a more neutral selection. Like most show homes, these were a bit too crammed with furniture and accessories (with the exception of the Google Guy's 01 stack pad) but did present how one can create a warm and unique environment that feels like a home 600 feet above Rincon Hill.

Although most Downtown dwelling San Franciscans are not going to spend $100,000 on furnishings and custom work, these events are brilliant for picking up decorating ideas and inspiration. My favorite ? The sofa upholstered with cork.

Not to be upstaged, Millennium Tower is hosting "Icons of Design" for the next four weekends, showcasing the work of 25 Bay Area designers on their 52nd floor.

It looks like this high rise living concept is catching on in San Francisco...

I Can Finally Say I Like Millennium Tower

Millennium Tower and I have had a tumultuous relationship since we were introduced a few years back.

At first, the renderings and floor plans seduced me into a brave new world of 5 star luxury without the hotel component attached, like St Regis and Four Seasons.

But as the building rose toward the sky and plans for the new Transbay Tower adjacent were finalized, I became disenchanted. Live next to a construction site for the next 15 years ? $1200 per month HOA dues ? No terrace ?

I reluctantly put Millennium Tower on the back burner and started seeing other developments.

After the building was finished I went for a tour. The Tower looked great. Finishes, amenities, views; everything was there. But the same misgivings I'd had before came up again. Still, it was great to see the finished product, even if it felt a little desolate.

Flash forward to last Sunday and the realization that sometimes, you need to look at property through someone else's eyes to see it's true appeal.

My clients and I have been searching for a new construction high rise pied-a-terre and have seen all contenders. Must-haves include views, two or three bedroom's and an environment that's conducive to enjoying The City with as little fuss as possible. Especially with two young children and a lifestyle that includes a primary residence a few hours drive away and frequent travel.

Pulling into the driveway, the valet took our cars and we were greeted by the Doorman, and then it hit me. This is how they do it in Manhattan. It would be daunting to drive up to your building on a busy city street and manage cars, children, luggage, et al without assistance.

Millennium Tower units are also larger than average. The typical 2-bedroom plus den is about 1600 square feet compared to 1400 square feet or less elsewhere. A four person family wants to be able to spread out a little, even in town.

Pricing has been adjusted by 15% for many months. That, and being open to lease-to-own agreements has led them to be 30% sold. A lease-to-own agreement may sound odd for a building of this caliber, but a buyer willing to part with almost $2 Million these days appreciates the opportunity for a test drive.

After we completed our tour my client summed it up: "I thought it was going to be old-school and uptight, but it's exactly the way we pictured living Downtown without knowing what it could look like."

I'm happy that Millennium Tower and I are seeing each other again and that I introduced it to my clients. It may be a perfect match.

For pricing, availability and details on the lease-to-own program at Millennium Tower, make certain to contact me.

A Fresh Take on a Much Maligned Market: Welcome to San Diego !

I've lived in San Francisco for 12 years and seen my fair share of California. But up until last Thursday, I had never been to San Diego. Along with world famous weather, I wanted to see one of the first residential markets to experience a major downturn when the 'bubble' started to burst back in 2006. The hardest hit part of the San Diego market was Downtown residential condominium towers which you all know hold a special place in my heart.

So, it was off to Sapphire Tower. Touted as the finest residential high rise Downtown, I was anxious to take a look at what constitutes "luxury" in San Diego. To be honest, my expectations were low.

Divided into three "Series" not unlike Millennium Tower; Sapphire tops out at 33 stories with density decreasing from six to four to two units per floor as you reach the Sapphire Series penthouses.

Featuring 10.5 foot ceilings, floor-to-ceiling glass for all windows, unusually large square footage and spectacular water and city views, this development team has done almost everything right. The finishes are truly luxurious and make some San Francisco development kitchens and baths look positively spartan. My only quibble: The lobby and common hallways do not match the unit interiors in terms of quality and style.

Since the grand opening last January, the Sapphire team has sold 32 out of 97 units with prices per square foot ranging from $373 to $2000. Their best Penthouse sold for $6.16M a few months ago-- just about what "G" paid for his Infinity penthouse back in '06.

Not all San Diego developments are doing as well as Sapphire Tower. Their success does prove that the right product at the right time at the right price will almost always sell, even in San Diego during a recession.

I had a wonderful visit but plan on staying put in my favorite city in the world, San Francisco.

Infinity Tower II almost 50% sold in 5 months. Hmmmmmm...

Through a combination of pent-up demand, attractive interest rates and significant seller discounts, The Infinity Tower II has approximately 140 out of 285 units currently in contract or closed since sales began in early February.

This astounding number of sales is not so surprising when you look at the fundamentals of the Downtown market. Achieving a great price in this environment is still possible, you just need to know the music so you can dance along and always keep your eye on the goal.

1.) Competition ? What competition ?

For those that want new, high rise and downtown, there are four choices: BLU, Millennium, One RIncon and Infinity. All are very nice buildings. Out of these four The Infinity seems to have the combination of amenities, views, location and value that are driving sales numbers that I didn't see in new construction even at the height of the bubble.

2.) V is for Value.

In an uncertain market it takes a compelling argument for buyers to pony-up the dough. That, and a motivated seller. Although buyers and their agents must sign confidentiality agreements regarding the details of their contracts, I can say that the discounts being offered at most sales offices right now are dramatic but not fire sale.

This may sound lame but it bears repeating: This is San Francisco. Buyers need to go through several rounds of offers before striking a deal.

3.) Reality Bites.

Sometimes buyers judgement gets a little cloudy which is no surprise given the emotional nature of purchasing a home. The most important thing to remember during negotiations is to keep your cool and try to put yourself in the seller' shoes. Even though they may be a faceless, corporate behemoth you are still working with a human. One that most likely has to report to another human. That, and this development is his or her baby. When you submit a low-ball offer don't be surprised with a high counter. You've just started to dance so don't get discouraged or angry, hang in there.

If The Infinity can keep it's current weekly absorption numbers going, they will be sold out by the end of the year. I don't think that's their goal, though. At half sold they have achieved an enviable velocity that can be slowed, if they so desire, to try to achieve higher prices on their remaining inventory. That may seem foolish given continuing economic uncertainty but don't believe you know what the seller is thinking.

Ask me and I'll tell you.

Pools, Theaters, Concierges, Oh My ! Downtown Developments Offer Amenity Packages to Lure Buyers, Secure Bragging Rights.

It used to be that when developers were planning a new condominium tower they would include a fitness center, provide a doorman and maybe throw in a pool and they were done. But when the market heated up in the early 2000's, they chose to offer more and more amenities to draw buyers, bolster the building's brand and differentiate from the competition. The flip side of these lavish extras is that they don't come free. For every additional feature, there is the cost to maintain and eventually replace that item-- and that adds to the monthly assessment for each unit in the building.

So is it better to go light on the amenities and reduce the HOA operating expenses, thus reducing the monthly dues ? Or is including even the most esoteric amenity (Olive Oil Steward, perhaps) the way to ensure prestige and future value ?

In post-boom San Francisco, we have three high profile developments that chose unique strategies when it comes to the dog park-guest suite-pilates studio selection process. Let's ponder their merits, shall we ?

BLU

At 112 units, BLU is the smallest community we will be comparing and its size is probably the primary reason the development team chose to go light on the extras. There is a 24 hour doorman stationed in the stylish lobby, a lovely landscaped terrace in the back with a barbecue and catering kitchen and... that's it. While some may squawk at the paucity of amenities, I think it was a smart move. The dues for these 2-bedroom homes average about $625 per month making them the lowest of the three buildings in our comparison. Less equipment to maintain, less energy consumed, less that can go wrong. BLU is the stylish yet sensible lady at the party whose "less is more" approach allows her to leave the diamonds at home while still offering up enough sizzle to keep the crowd interested.

Infinity

Most of my readers are well versed in The Infinity's amenities package, but here's a recap for the uninitiated: heated indoor lap pool, enormous fitness center, his and hers saunas, pilates studio, doormen in all four lobbies, concierge, screening room, business center, conference room, and club room with caterers kitchen and terrace. This impressive list is but an elevator ride away. That said, it's an awful lot of stuff to maintain, so the dues for a 2-bedroom here average about $760 per month. What makes it work? There are over 700 units in the complex, so it's not an onerous cost per individual unit.

Millennium Tower

Representing the ultimate in condominium amenities, Millennium Tower is as luxe and over-the-top as it gets in Downtown San Francisco. In addition to the gym, pool, business center and everything that Infinity offers, Millennium boasts a private dining room serviced by the on-site restaurant RN74, climate controlled wine storage for every unit and an army of liveried staff to take your shopping bags, valet your car, open the door and push the 'up' button on the elevator. If you want 5 star service 24/7, this is the building for you. The price ? Well, if you have to ask.... I'll tell you. This glamour will run you about $1400 per month for a 2-bedroom.

It seems that there is a building for every taste and budget Downtown. Although paying monthly dues on top of the mortgage and property taxes isn't for everyone, it sure beats cleaning out the gutters and mowing the lawn on weekends.

"Thank you for calling Future Downtown Residential High Rises, please hold."

The last two weeks welcomed the first closings at both Millennium Tower and Infinity Tower II with BLU on schedule for May. As these lucky homeowners move in they are probably unaware that they are the first wave of the last batch of new residents we will see Downtown for what could be a decade. These buildings represent the last of the "boom" developments to be completed and open their doors. This however, was not always the case.

It was only a few years ago that developers had been planning three more large-scale condominium towers that would already have broken ground and have sales offices open at this time. All of these projects have been either shelved until further notice, put up for sale or both. The absence of these towers has made an undeniable impact; not only on the skyline but in the downtown residential inventory pipeline.

A brief rundown of the history and status of what could have been:

Turnberry announced last November that they had sold a 50% equity stake in their proposed 40 story tower at First & Harrison. Ground breaking had been scheduled for March of '09. With spring weeds rising on the empty lot instead of concrete and steel the joint ownership is shopping the entitled development to potential buyers.

Across the street at One Rincon Hill; the 50 story Tower Two remains on indefinite hold. The development team announced last week that they are still just 70% sold after nearly three years of marketing. The ghost of Tower Two is still very much part of the logo and marketing collateral for the development. With the first tower standing alone atop Rincon Hill it seems like one half of a broken heart pendant; waiting to be reunited with its lost love.

Traveling one block further east to Harrison and Fremont we encounter more weeds where The Californian should be rising. Developer Fifield's 393 units have been actively shopped for two and a half years with a suitor yet to be found.

One could interpret this as evidence of continued weakness in the San Francisco condominium market, but I disagree. These three developments would have added just over 1,000 units of new construction inventory Downtown. Without the competition and specter of over supply, Downtown developments are doing just fine (albeit with the implementation of significant price adjustments).

Don't cry for the towers that are still just a twinkle in their developers eye. One Hawthorne is proudly representing for them as it rises at the corner of Howard and Hawthorne. The timing for the 24 story165 unit development might be just right.

OMG ! EIK, WIC & FTCW ! Real estate acronyms 101, Title 24 & You.

Many people are familiar with the sometimes hilarious acronyms that Realtors use as shorthand to make the most of expensive ad space. EIK, WIC & WBF are more commonly known as eat in kitchens, walk in closets and wood burning fireplaces.

One acronym I have wanted to use but realized no one would understand is FTCW. FTCW or Floor-to-ceiling windows have become one of those encoded signifiers of style and luxury at most of the new and newer Downtown developments. Along with the prerequisite stainless, granite, and hardwood; FTCW have become one of the defining architectural characteristics of new buildings like Millennium, Infinity, & BLU. In Realtor prose, almost always preceded by "Stunning views framed by...", FTCW make even modest square footage feel larger and lighter which also allows developers to charge a premium for these homes even if they are smaller than comparable properties.

What few people realize is that this dramatic feature will most likely become a thing of the past since Title 24 came into law as part of the 2007 California Energy Code. Title 24 was passed in response to increasing energy costs and awareness about our dwindling natural resources back in 2007 when, if you referred to a building as "green", most people assumed you were talking about the exterior color. When you consider heating and cooling these ultra-glazed spaces, it does seem a bit extravagant given our current circumstances.

The new Energy Code increases the efficiency standards for almost all aspects of both commercial and residential new construction. Although most of the changes won't be discernible to the average buyer, a tower sporting a luscious all-glass facade certainly makes a different impression than a window and panel sheathed building. Think Millennium vs The Metropolitan or Heidi Klum vs Barbara Bush. You get the picture.

The current batch of high rises that make use of FTCW-- or glass curtain wall construction-- were designed and approved before the adoption of the 2007 code leaving One Hawthorne perhaps the last high rise under construction in San Francisco to utilize this design feature. Will the current vogue for endless sight lines diminish in a more frugal and less ostentatious age? Or will the glass towers become more desirable in the future compared against their more conservative, hemmed-in and energy efficient neighbors ?

OTWT,TTFN (Only time will tell, ta ta for now).

Millennium sees the writing on the wall and Obama gets sworn in on The Mall. Plus, Barbara Corcoran tells it like it is.

While most developments in San Francisco started lowering prices in October and November of last year, the team at Millennium Tower has decided to join the party. They announced last week that prices were being cut by 15% across the board and took an unprecedented and most gracious step by extending the discount to their buyers already in contract. While this move undoubtedly promotes good will between those buyers and the developer, it is also a strategic maneuver that will enable appraisals to “pencil out” for the bank underwriting departments. It also encourages buyers who went into contract before the banking system collapse to close escrow instead of walking away from their deposits. But if you can afford $1,000+ a month in homeowner dues, you probably are not worried about coming up with enough dough to close escrow. The Millennium Team is counting on it.

In other news, the San Francisco Association of Realtors held its annual gala at The Intercontinental Hotel this past Thursday evening. I was proud that my company had two tables of our agents and brokers at the event. The highlight of the evening was the keynote speaker Barbara Corcoran, founder of the Corcoran Group (one of the most successful and prestigious real estate brokerages in New York City). Ms. Corcoran founded the company in the early 70's and successfully grew her organization during some of the worst economic crises of the past 40 years. One example: New York City nearly declared bankruptcy in 1975 and real estate values plunged 50% that year.

Corcoran's advice for getting through tough times and even thriving? In a nutshell: Ignore the media, take a well-deserved vacation, and then work on your business while everyone sits back and waits it out. Finally, have faith in America's power to innovate because you never know what’s coming around the corner.

Today's inauguration could not come soon enough.