Downtown Inventory Sampler: Back-To-School Special

It was July 7th when we last visited our ten pet developments. Summer was just kicking off and now, sadly the season is almost over. But this isn't Nantasket nor Nantucket. Any San Franciscan worth their salt knows that September and October are the warmest and sunniest months of the entire year. The best is yet to come.

Inventory in San Francisco is typically low in August with summer buyers completing transactions and vacations taking priority for others. The numbers below seem to bear that out with the anticipated September inventory bump right around the corner.

The Beacon

Three studios, five 1-bedroom, two 2-bedroom. Available units: 10. Total units: 595.

The Metropolitan

Six 1-bedroom, four 2-bedroom and one 3-bedroom. Available units: 11. Total units: 342.

Watermark

One 2-bedroom and one 3-bedroom. Available units: 2. Total units: 136.

200 Brannan

One 1-bedroom, Five 2-bedroom and one 3-bedroom. Available units: 7. Total units: 191.

The Brannan

Two 2-bedrooms. Available units: 2. Total units: 339.

The Potrero

No resale inventory. Total units: 155

The Hayes

No resale inventory. Total units: 128

Arterra *

No resale inventory. Total units: 269.

The Infinity *

One 1-bedroom, one 2-bedroom. Available units: 2. Total units: 364 (excluding Tower II).

One Rincon Hill *

Two 1-bedroom and One 2-bedroom. Available units: 2. Total units overall: 376.

* New inventory still available from the developer.

Expect these numbers to swell like the crowds at Dolores Park as the fall selling season kicks off after Labor Day.

For more detail and guidance on the Downtown market whether you are a buyer or a seller, contact me.

201 Folsom (Infinity Junior) Would Like A Three Year Delay Granted, Pretty Please ???

I just parked my VW on Main Street and was feeding the meter when I spied one of those Planning Department Public Notices which are always interesting. Sometimes the property owner or renter wants a license to serve alcohol. Others announce the desired intention to either demolish a building or get a project approved. This one however, I had never seen before:

"An application for an extension in the performance period for another 3 years from the original expiration date of Case No. 2000.1073C, Motion No. 16647, for the approval of a mixed use project consisting of an 80-foot podium, with up 725 dwelling units, 750 off-street parking spaces, 38,000 square feet of commercial space and 272 replacement off-street parking spaces for the adjacent USPS facility. No changes are proposed for the existing project as originally approved."

This was posted last Monday and the hearing occurred last Thursday at 1:30PM. Although I was unable to attend, I'd be surprised if The Planning Department didn't rubber stamp it and move on to someones illegal in-law unit in the Sunset.

With any luck, the plans for Infinity Junior (sorry) 201 Folsom will remain shelved; awaiting a more favorable lending environment for large-scale developments. One catch, though. A Tishman Speyer insider told me that the as-approved project would need to achieve prices of $1400 per square foot in order to break even. As optimistic as I am about Downtown condominiums, I don't see prices doubling five years from now. That would be the time these units hit the market if construction begins three years hence.

One never knows what the future will bring, but I'll bet you lunch at Prospect (which Nancy Oakes officially purchased in The Infinity's restaurant space two weeks ago ) that the current design will need some tweaking in order to pencil out in the near-term. That, and parking on Main Street is going to be a lot more difficult.

For the latest availability and pricing at Downtown condominiums, drop me line.

Would You Like Pre-Paid HOA Dues With That Condo ? Banks May Say, "Not So Fast..."

My clients and I were expecting our loan documents to be at title and ready to sign Friday afternoon. Friday came and went, no docs. We were told to expect them Monday for sure. As I write this, they have not appeared at title.

"What's going on ?" I asked the broker, who normally gets things done when promised and is quick with responses. The reason was twofold, and could have a big impact on the way we have been structuring new construction sales contracts for almost three years.

When the market started to soften in San Francisco toward the fourth quarter of 2006, developers had to get creative. I remember brainstorming ideas on how to create an incentive for new buyers while not alienating those that were already in contract by reducing prices. The answer was credits !

Credits to the buyer in the form of pre-paid HOA dues,design center credits, interest rate buy-downs and/or closing costs became all the rage.They allowed the sales offices to keep their prices high while offering value-adds to skittish buyers that were spooked by what they were seeing in the Las Vegas, Miami and Arizona markets.

Even when sellers finally bit the bullet and lowered prices late last year,credits were still the icing on the cake for most deals. It seems this is about to change.

I'm not clear yet on whether it's lenders, appraisers or both; but banks are starting to take the dollar value of those incentives and reduce the appraised value by that figure. This throws a huge wrench into the gears that have been making deals happen in new construction and could spell out a new reality for buyers and developer sellers.

No matter how you feel about these credits, it does make one wonder why banks and appraisers should be allowed to dictate how deals are structured when incentives have nothing to do with an appraisers job of justifying value.

Even if this does come to pass and credits are somehow eliminated from these transactions, I'm not overly concerned. Where there is a will, there is a way and a developer that needs to sell units can be very willful indeed.

Bored Buyers Bemoan Banal Buildings; Brace for Beacons of Bravado.

I've been working with a fabulous client, lets call her Gigi. Gigi has lived all over the world and has a healthy budget (1Million give or take) and a desire to live Downtown. We've seen everything from One Rincon Hill to The Ritz Carlton and back again and her feedback has been consistent: Nice buildings, great locations, but is there anything "new" ? What she means by new is New; fresh to the market, still rising, a dream unfulfilled but reaching for the heavens. I get where she's coming from.

Three years ago when the real estate market was zooming ever higher and multiple developments were rising Downtown and more planned, there was a sense of optimism and excitement. The City was changing, empty lots were filling in and a whole new way of living in Downtown San Francisco was quickly becoming the way to live in San Francisco. We all know what happened shortly thereafter; cancelled projects, delayed second phases and a skyline left in limbo.

Like a rainbow after a thunderstorm, I have good news. There is a new tower rising at Howard and Hawthorne that will add some much needed new blood. One Hawthorne has topped off at 24 stories and its facade is almost complete. Its a fine looking edifice, offering not only the promise of a fresh option Downtown but a return to a sense of progress and change. You might compare it to shopping at your favorite clothing store: You visit week after week, searching for a new look and ending up seeing the same old stuff. Well Downtown condo shoppers, that is about to change.

It can't come too soon for Gigi. Her insatiable thirst for high-rise living has caused her to rent a beautiful new condominium Downtown until One Hawthorne is ready for occupancy. Cheers, Gigi !

If you would like to be put on the priority interest list for One Hawthorne make certain to let me know.

LEED, SCHMEED. Just turn the lights off when you leave the room!

It's official. San Francisco now has it's first 'green' residential high rise. Arterra in Mission Bay was awarded a LEED (Leadership in Energy & Environmental Design) Silver certification last week which means that the building achieved the required points on the scale that measures environmentally friendly practices and design. From their website:

Green Building Council members, representing every sector of the building industry, developed and continue to refine LEED. The rating system addresses six major areas:

Sustainable sites
Water efficiency
Energy and atmosphere
Materials and resources
Indoor environmental quality

LEED was created to accomplish the following:

Define "green building" by establishing a common standard of measurement
Promote integrated, whole-building design practices
Recognize environmental leadership in the building industry
Stimulate green competition
Raise consumer awareness of green building benefits
Transform the building market

That's a pretty wide-ranging mission they have there. Granted, environmentally sound building practices and materials were around long before LEED came up with their criteria and scorecard.  We do have to start somewhere, though and there are now hundreds of LEED certified buildings across the country. The irony is that almost all of them are in cities. Urban environments are inherently "greener" than the suburbs because they use less space, energy and resources to support higher human density.

When I think about the relative efficiencies that a LEED certified building provides versus a non-LEED building compared to acres and acres of McMansions bleeding the grid dry, I wonder if the LEED emphasis on urban construction is misplaced. 

In future, we will see more efficient building practices become the rule and not the exception and LEED certification is an important and viable first stage in this cycle. Just like hybrid vehicles are not the ultimate solution to our dependence on oil, but an important "bridge technology" that will get the auto industry to the next platform for efficient 4-wheel transport. Regardless, it's important to support new methods and technologies as they develop and LEED certification is one step in the right direction. 

Turning the tap off while you brush your teeth is another !

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.

Just like Champagne & Caviar (or Beer & Pizza): Coveted Neighborhoods & Parks Go Together.

London has Regents Park. Paris, The Tuileries. New York has Central Park and even Los Angeles has Griffith Park. What about San Francisco ?

Sure, we have Golden Gate Park, The National Seashore and even The Presidio. But what do you do if you live Downtown and want to go for a run, bathe in the sun or just have some outdoor fun ?

Depending on where you live Downtown, there is a wealth of options for public space. Most of these parks have their own unique flavor and style, making them true San Francisco gems.

Here's a rundown of Downtown San Francisco park options. Don't forget sunblock:

South Park

Bounded by Second and Third Streets and Bryant and Brannan Streets, South Park was laid out in the 1850's and was modeled on the oval shaped urban residential parks that began showing up in England and the US in the mid-1700's. Designed to be the last word in plush residential developments, South Park quickly lost favor with the rich as it's proximity to the working waterfront never made for peaceful coexistence. Fast forward to the 21st century and you see a neighborhood park that retains its original shape and scale but is now surrounded by design firms, tech start-ups, cutting-edge condominiums and a wide array of dining options. The plantings and hardscape could use some freshening but it's still a great space to grab lunch or read under a tree.

Mission Creek Park

The newest park Downtown, Mission Creek Park is located on both sides of the channel or 'creek' and has Berry Street as it's Northern border and Channel Street to the south. Developed in 2000 by ProLogis Corporation, the park is beautifully designed and landscaped. It provides a wealth of recreational options including a fenced-in dog run, basketball courts, tennis courts and a public kayak launch. Mission Creek Park offers residents and visitors alike a pristine respite from the noise and traffic of the city. As the south side of Mission Bay continues to develop, this park will link to other parks forming a network of green spaces that will snake through the neighborhood and along the waterfront. Some may criticize Mission Bay as being generic, but the parks running through it will create the greenest neighborhood in San Francisco.

The Embarcadero

Spanish for 'wharf' or 'pier', The Embarcadero is undoubtedly Downtown's most spectacular public space. Stretching from Pier 37 all the way around to AT&T Park, The Embarcadero is famous for it's views and the sheer scale of it's unbroken waterfront access. Perfect for cyclists, runners and baby strollers alike, one doesn't have to worry about the stop and start of crossing streets but still needs to be aware of tourist groups shuffling along and the occasional sea lion. A thorough upgrade started over ten years ago has been completed featuring public art and street furniture by Stanley Saitowitz and other local notables. The Embarcadero hosts The Ferry Building, a fire boat station, visiting ocean liners and one of the worlds best farmers markets. Given the cinematic scenery, it's no wonder that The Embarcadero appears in TV commercials consistently. Simply stated, it's one of the worlds most spectacular urban parks.

Now that you know where to go, get out there and enjoy! SPF 15 or higher.