New Towers, Conversion Plan Could Add 850 Units in SF
By Lizette Wilson and J.K. Dineen
San Francisco Business Times
A Miami-based developer has put two big bets on San Francisco housing, placing an existing highrise under contract for conversion to condos, and agreeing to acquire a Civic Center development site where it could build 531 more.
Sources indicate Crescent Heights placed the two properties — the Rincon Tower Apartments and a site at 10th and Market streets — under contract in the last few weeks. Together, they could create 850 new condos.
The deals are not surprising, given the city’s still-frothy condo market and Crescent Heights’ aggressive reputation. The condo developer already owns the Metropolitan at 333 First St., a development completed in 2004 where units go for an average of $738 a square foot. The project sold out shortly after completion.
Crescent Heights would purchase Rincon Towers for $115 million. Should the deal close — it has been under contract at least one other time since the Blackstone Group put it on the market — it would reshape the area’s demographics and add another fixture in the city’s growing fashion for highrise living.
The two tower complex at 88 Howard St. includes 320 apartments, covered parking and some amenities. The Blackstone Group won approval from the city last year to turn the units into condos, provided they also sell 76 of them at below-market-rate prices, an option Crescent Heights is expected to exercise.
“It’s been our understanding they would convert them (to condos) within 60 days of the sale. It’s the wholesale emptying of the building, potentially,” said Dave Osgood, president of the Rincon Center Tenants’ Association. “A lot of people can afford $2,000 a month rent, but won’t be able to afford a $2 million condo.”
Although a number of units are small — some are just 400 square feet — a handful are premiere highrise two-bedroom, two-bath units measuring nearly 1,200 square feet and with unobstructed bay views.
It’s not known what, if any, upgrades Crescent Heights will make to the property and to the individual units before putting them on the condo market. Neither Crescent Heights nor Blackstone Group responded to calls seeking comment.
Players were more forthcoming on Crescent Heights placing a two-acre parcel under contract at 10th and Market streets, however. “Crescent Heights is under contract to purchase the property from TNDC and Citizen,” said Viktoriya Mass, the city planner assigned to the project.
Mass said the revised project must first go under environmental review and that a notice has been sent out to neighbors.
The Citizens Housing Corp. co-owns the site with the Tenderloin Neighborhood Development Corp. (TNDC). The nonprofit housing groups kept about a quarter of the property at the corner of Mission and 10th streets with the intention of building 150-200 senior housing units.
Citizens Housing President James Buckley declined to name the price or identify Crescent Heights as the buyer, but did confirm the property was under contract and said the proceeds would be put into an endowment fund for Citizens Housing and TNDC.
“We hope to close in the next several weeks,” he said.
The condo towers — a specific number has not been proposed — could reach as high as 352 feet and include 650 units, according to the notification for environmental review filed with the city.
Matt Franklin, director of the mayor’s office on housing, said the city has been supportive of efforts to market the front portion of the site, with the expectation that significant number of affordable units would be built on the back side. He said the proposed development is consistent with the city’s vision of Market Street as a bustling corridor of commerce and high-density, transit-oriented housing.
Gabriel Metcalf, executive director of the San Francisco Planning and Urban Research Association, called the proposed housing towers “a great idea.” “From a global and regional and city perspective, this is the perfect place to create opportunities for a lot of people to live,” he said.