Home News New SF condo building sits empty. Neighbors and homebuyers want to know why

New SF condo building sits empty. Neighbors and homebuyers want to know why

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The handsome new 109-unit condo building on 55 Oak Street is doing a lot for it, if marketing material is believed.

The building near the intersection of Market Street and Van Ness Avenue, called “Oak,” promises to be “the gateway to San Francisco’s most exciting district.” We are proud to be both “your home on the Hayes Valley skyline” and “an oasis along Market Street”. It features “two sculptural glass towers connected by a sky bridge over a quiet Zen garden.” There is a fitness centre, two roof decks with grills and fire pits, and a resident lounge.

Still, for the 14 homebuyers who deposited deposits to book units in the building, it has been a source of deterioration and confusion for months. Instead of opening in late 2021, as the broker first said, the building remained empty, buyers were stuck, the entrance was boarded, and the west wall was covered with graffiti.

Approximately 10 months after signing a $ 825,000 condo contract in Oak, city planner Joshua Croff and his partner software designer Keyang Sun told lenders that the deadline for purchasing units continues. I had to go back times. delay. The current loan, which is fixed at 3.15% interest, will expire next month. When interest rates rise, interest rates on new loans exceed 5% and monthly payments increase by $ 1,000.

Josh Croff (left) and Keyang Sun are posing for portraits in a San Francisco apartment. The couple planned to move to an oak condo six months ago, but due to uncertainty about the future of the building, they are concerned about losing their deposits.

Ethan Swap / Chronicle

To make matters worse: increased evidence suggests developers, China-based Z & L Property, I’m not going to close any condo. Z & L has a refund tax of approximately $ 2 million on properties, in addition to several mechanic liens submitted by the subcontractors involved in the development. And several commercial real estate sources familiar with the situation say that developers hold brokerage Kider Matthews to sell real estate in bulk to rental housing investors rather than continuing to sell condominiums. say. Kidder Matthews did not return a phone call or email asking for comment.

This may not be the first time Z & L has run into problems investing in San Francisco. The company built the Hayes Valley condominium development 555 Fulton St., but more than three years in mid-construction as the builder chose to redesign the project after approval without the permission of the city planner. It was stagnant.

In addition, company executive Zhang Li was involved in a federal corruption case. Former Public Works Director Mohammed Null, Was charged with public corruption in January 2020. The indictment states that Nuru has met Li many times in China, and that a Chinese developer has given him a gift and placed him in a five-star hotel for free. In exchange, Nuru “used official influence with other city authorities to solve the problem” that the developers encountered.

It’s been a difficult journey for Z & L since it bought development sites in Los Angeles, San Jose and San Francisco in the mid-2010s. The group purchased oak parcels for $ 23 million from Trumark, which went through the city’s approval process. In 2019, the group received $ 76.8 million in funding to develop the building.

The property consists of two parcels, and public records show that the property owner has a refund tax of $ 2.05 million. Of the 14 contracted units, 3 have been canceled and 11 have become thin. The units are still for sale, with the cheapest at $ 625,000 and the highest at $ 1.8 million.

Mr. Klov said he and Mr. Sun were excited to buy in the building and the whole process was “an emotional roller coaster that throws and turns many nights.”

Keyang Sun works at a desk in San Francisco. Sun and his partner Josh Klov were planning to move to a new condo a few months ago. However, the project developer pushed the date move back several times. They are thinking of starting to look for a new home.

Keyang Sun works at a desk in San Francisco. Sun and his partner Josh Klov were planning to move to a new condo a few months ago. However, the project developer pushed the date move back several times. They are thinking of starting to look for a new home.

Ethan Swap / Chronicle

“We were pretty ecstatic when we finally found a place and signed a contract last October,” he said. “We wanted to find something new, energy efficient and full of natural light in the heart of an easy-to-walk area. It’s a bit better in design than many of the others we’ve seen. However, it was reasonably priced. “

They fell 3% (about $ 26,000) and were told that the move-in date is likely to be December last year. The developers have loosened the deal by agreeing to pay a portion of the closing costs. However, three more deadlines have passed since then, and developer brokers now state that the deadline will be postponed indefinitely.

“Every time they promise us something, they overturn the promise,” Croff said. “Every time there was a delay, I had to go back to the bank to extend interest rates or start a new loan application. This is a nightmare. We’ve been hanging out to dry.”

At this point, Croff and Sun, who are currently renting at the South of Market, are hoping to resign and regain their deposit due to the possibility of not being able to buy the condo.

“We feel very patient. We understand the delays in construction and expect some of them. But now we are missing out on other properties and prices are rising. The housing market was so hot in the first place because interest rates were low. ” “It’s a kind of buyer to be aware of the situation. There’s a lot of riding this for all the people who have a contract and future homebuyers. That’s a caution.”

Z & L executives did not return multiple calls or emails.

Darlene Chiu, a business consultant who has worked with a Chinese company investing in San Francisco, said Z & L is still working on selling condos in Oak, but the pace of absorption is much slower than expected.

“Z & L continues to be interested in being part of a solution to San Francisco’s housing shortages, and I’m surprised to see such a soft market right now,” she said.

Jim Worstel, director of the Hayes Valley Neighborhood Association, said the sooner the building was sold, the better for the neighbors. Unlike the 555 Fulton St. building, which suffered from delays and had dozens of code violations, the oak seems to be well built, but the longer it is free, the more likely it is to be annoying. increase.

“It will be further damaged and will continue to be ignored. They obviously don’t take care of it,” Worstel said. “As far as I am concerned, the sooner I can get an owner who cares about it, the better.

He said the switch from sale to rent could be a net plus for the neighborhood as it could mean that the unit fills up faster.

“Everything about it is great — the only clumsy thing is what they are doing to buyers,” Worstel said. “You must treat those people fairly and make sure their deposits are refunded.”

JK Dineen is a staff writer at the San Francisco Chronicle. Email: [email protected] twitter: @sfjkdineen

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