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S.F.’s best apartment bargains are in brand-new buildings

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If you have considered migrating to SoMa or Mid-Market, this may be your moment.

Some of San Francisco’s latest buildings are packed with amenities and offer significantly discounted rents in the downtown market, which is still receding from the pandemic downturn.

“Rentals can get their brand new place without having to pay for their arms and legs,” said Kevin Ho, a realtor at Vanguard Property. “They just ask for your arms, not your feet.”

5M-developed George’s rooftop view on Minna Street in SoMa offers spectacular views of the skyline. (Craig Lee / Examiner)

Rents for these buildings are not always cheap. However, some properties offer special discounts, and tenants are now well below the city’s average rent of $ 2,900 for a one-bedroom apartment and $ 4,000 for a two-bedroom apartment, with a bathtub that has never been used before. You can enjoy it at a price. Zamper.. In at least one case, some market rate units are cheaper than units below the equivalent market rate in the same building.

These discounted rents partially reflect the high-profile challenges facing the midmarket, SoMa and Tenderloin, such as homeless and field drug trading. Yet another factor is the reduction in insurance premiums due to the proximity to the financial district due to the mass adoption of remote work.

As a result, these deluxe apartment buildings are finding the foundation for a wider range of tenants. “I didn’t expect to live in a building like this,” said Rob Chua, a non-profit consultant at Avenues Consulting, who is moving to a new unit in George at SoMa this week. “I’m a child of immigrants and grew up in the Philippines. It’s like a dream come true.”

Robture in the showroom apartment at George Apartment will soon move to his new unit there.  (Craig Lee / Examiner)

Robture in the showroom apartment at George Apartment will soon move to his new unit there. (Craig Lee / Examiner)

Chua pays $ 2,800 a year for a one-bedroom room on the 18th floor. This also provides library-style coworking space, multiple outdoor terraces and barbecues, and a communal bar. All of these are decorated with vintage hotel decorations. Part of the 5M development, this building is opposite a new park that hosts regular performances and community events.

Chua’s rent, which has a par value of $ 3,600, has been significantly reduced thanks to a two-month free promotion and an additional $ 2,500 rent credit. With these incentives, a two-bedroom apartment with a par value of about $ 3,800 can be purchased for about $ 3,000 for a 12-month rent. After that, the lessee has to pay the full amount or pack the bag.

At Trinity Place near the midmarket, which launched its fourth and final phases in July, leasing agents “feel much more diverse in who wants to get off here,” said Shad Newman, Vice President of Trinity. Says. “Originally, there was a lot of focus on technology, but it’s still part of it, but it’s seen by many, from retirees to students.”

The two-bedroom, new building with a panoramic terrace on the 16th floor overlooking the City Hall and the city’s largest Whole Foods in the basement, is available for approximately $ 2,900. Elsewhere in the giant Trinity Place Complex, a brand new one-bedroom is available for $ 2,500.

These buildings are not unusual. Opened in late 2020, 50 Jones is a midmarket building with one bedroom for about $ 2,500 and two bedrooms for about $ 3,100. Next to Prism, which opened in January, a two-bedroom with incentives is available for about $ 3,200.

“There is a bit more demand for pricing in other regions,” says Newman. “For example, Pacific Heights and Marina are back within 5% of the pre-pandemic rate,” Newman said, Trinity Place is still about 15% below the pre-pandemic rate.

For Joel Yawili, the first tenant of Trinity Place Phase IV, discounted rents and downtown location were the perfect combination. “Because of the pandemic, I thought there would be an OK, cool, really good opportunity,” he said. “I’ve lived in New York for nine years and missed the feeling of being surrounded by big buildings. This sounds crazy, but I like the modern look and modern aesthetics.”

Joel Yawili calls the rent for his one bedroom apartment in Trinity Place Apartments quite good.  (Craig Lee / Examiner)

Joel Yawili calls the rent for his one bedroom apartment in Trinity Place Apartments quite good. (Craig Lee / Examiner)

Google’s product manager, Yawili, refused to share the price of a one-bedroom, but described it as a “very good deal” and said, “One silver lining from this pandemic would be a mistake. Not this building. “

The downtown rental market is relatively sluggish, but developers are motivated to fill new apartments as soon as possible rather than waiting for the market to rise.

“The overall goal is to bear the costs and ultimately make some money for the investors,” said Ray Amzande, a rental apartment broker who oversaw the rental of a new building in San Francisco. “So, if you’re sitting in a vacant unit, not only are you not making money, you have to pay all expenses and property taxes and everything else from your pocket.”

Ten months later, Trinity Phase IV 502 units are about 50% leased, according to Newman. This is far from Phase III, which opened in 2017 and was leased in just over 10 months. Still, Newman is confident that the building will fill up in the next three to four months as more companies bring their employees back to work. He said the rest of the Trinity Place Complex is 96% leased.

The courtyard of Trinity Place Apartments.  (Craig Lee / Examiner)

The courtyard of Trinity Place Apartments. (Craig Lee / Examiner)

George’s 302 units are leased about 25% two months later, said Christie Donnelly, director of San Francisco in Brookfield. Almost one-third (30%) of the units in the building are offered to middle-income households, the largest proportion in the city’s history, at prices below market prices. However, these units are provided in collaboration with the city, which processes applications and income checks, so only two have been leased so far.

Units below George’s market price are available to households that earn 100% to 150% of their median income in the region. In other words, in some cases, units below the market price will be offered at a higher price than the market price, even before promotion. Will be considered.City DAHLIA Affordable Housing Portal Shows below a market-priced one-bedroom available for singles at around $ 3,100 and $ 3,800, which account for 125% and 150% of the median income for the region, respectively.

George's library and meeting area.  (Craig Lee / Examiner)

George’s library and meeting area. (Craig Lee / Examiner)

Recent Budget and Legislative Analysts Report For vacancy of units below market rate (BMR) (currently 15%), affordable units for middle-income earners may no longer compete with market rate units.

“Some lessees find that they can rent a slightly larger unit, or a nearby unit of their choice, for about the same price as a BMR unit, especially if the target BMR unit is priced at 100% AMI. “The report states.

BMR rents, which are set in proportion to household income, are less flexible than market-priced rents, which can change rapidly to reflect changes in market conditions. A Brookfield spokesperson emphasized the fact that units below George’s market price provide protection from rising rents as the market recovers.

For now, at least in downtown, market conditions remain favorable to lessees. This is one of the reasons why several housing projects are under construction in San Francisco. “When we try to fund a new building, we must be able to show at least a stable high occupancy and rent, even if it’s not rising,” said Sujata, director of a San Francisco city planning think tank.・ Sri Bastava states. spur. “It’s really hard to build a house in San Francisco at this point,” coupled with high construction costs and interest rates.

This means that even if the harvest of today’s new building is currently losing money, it is set well in the medium term and it is expected that new developments will rarely come online within the next year or two. “During the pandemic, so many housing projects were put on hold,” Donnelly said. “There are few projects like this.”

Chua knows that his bargain may not last long. “I have a year, but I need to see if it’s worth it to me,” he said.

However, while living in George, he looks forward to helping the building integrate into the wider SoMa community, especially the Filipino community, which has long been called a neighborhood home. “I have never lived in SoMa, but SoMa has a place in my heart just because my elders came from here,” Chua said. “I think it’s important to understand where you are and where you are.”

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