October 20, 2006
188 King Street: The Rents
Based on a number of craigslist ads (and another email from our tipster), it appears that rents in 188 King street are running from $2,795 (1br) to $9,500 (2br penthouse). Not a bad way to try out the building, and the neighborhood, if you're considering a purchase (especially if you can pre-negotiate an option to buy).
According to our tipster, “The units on the second floor in the back, with the separate bedroom type area and the huge patio are going for $3200 per month and are leasing quickly” while “The units in the back of the building above the second are [priced] at $2795,” and “They claim to have leased the third floor and now are working on the fourth as they work their way up the building.” In addition, the front penthouses are going for $5,000 while the larger 3,000 sqft penthouses in the back are going for $9,500.
An important consideration if you’re interested in buying one of the units in the front-half of the building: quite a few lenders will refuse to finance a condo in a building that is less than 60% owner-occupied. It's something to consider in terms of resale as well.
∙ The Scoop On 188 King Street: Now
Selling Leasing [SocketSite]
∙ $2795 / 1br - New construction! [craigslist]
∙ $3200 / 1br - Brand new luxury loft w/ LARGE deck! [craigslist]
∙ $5000 / 2br - Fantastic penthouse w 16ft ceilings [craigslist]
∙ $9500 / 2br - 3,000 SQUARE FOOT PENTHOUSE!! [craigslist]
First Published: October 20, 2006 1:15 AM
Comments from "Plugged In" Readers
How much for parking?
Posted by: The Others at October 20, 2006 11:26 AM
That’s a great idea re: trying out the building/neighborhood with an option to purchase. Would also be a great show of confidence from the developers in their product (“try it, you’ll like it”). As you pointed out, however, eventual financing could still be a problem depending upon the eventual owner/renter mix.
Posted by: I Like It at October 20, 2006 11:33 AM
Hi 'I Like It' - those are not likely postings by the developer, but are instead postings by purchasers as investments.
Posted by: Geoff at October 20, 2006 12:17 PM
Geoff – while I’d usually assume the same, in this case all the postings are from the developer (or at least their sales/marketing arm). A bit of skeptic, I confirmed the earlier SocketSite post: 188 King is aggressively pursing rentals (versus new sales).
Posted by: Michael at October 20, 2006 12:59 PM
what is the reason that lenders are less willing to finance a condo that has more renters?
Posted by: Anonymous at October 20, 2006 1:23 PM
It usually has to do with two things: mortgage default rates (higher for non-owner-occupied condos) and maintenance of the building (the security for the loan).
From an Inman article: “Many Realtors who specialize in condo sales say that 80 percent to 90 percent of renters take less care of a condo than an owner does. They say about 10 percent take better care than owners, but very rarely do you have an investor taking better care of his investment property than his primary residence.
Most tenants take reasonable care of their unit and only a very small percentage are absolutely terrible, a Realtor survey showed. But it also pointed out that they rarely saw renters doing the extra-added things -- like picking up around the building or forming a work party to do some common-wall painting.”
Might not be an issue with 188 King (since it’s really one owner with a vested interest in maintaining the property), but at the very least will probably take some explaining and some lenders might baulk. Regardless, it’s a good thing to keep in mind if the market changes from a focus on sales to rentals.
Posted by: Anonymous at October 20, 2006 2:23 PM
Wouldn't the owners have to disclose this to any future potential buyers of a unit in that building? Seems like a very substantial piece of information.
Posted by: Amen Corner at October 20, 2006 4:51 PM
In a multi-unit building, the owner occupancy rate isn't something a seller would necessarily know. But, it comes out during the loan process, because the condominium association/management company has to make that information available to the bank. In a new development like 188 King, I would think the developers would have established a relationship with a lender to help potential buyers secure financing (like many new developments). I recently looked at a unit in a 12-unit condominium development at the corner of Sutter and Mason. This was an established association (not a new development). The agent was the owner of unit for sale and told me a Hong Kong developer owned 5 of the units and kept them for corporate travelers (of their own company), and they owned the ground-level (and vacant) retail space. At least one of the other units was a rental, too, meaning the owner-occupancy rate was at or under 50%. I wondered if that might pose a financing problem but didn't pursue the property further.
Posted by: Christopher at October 20, 2006 5:07 PM
since these are lofts with high ceilings, will these cost a lot more to heat and cool than condos?
Posted by: aptsguy at October 21, 2006 5:23 PM
No, I used to own a tri-level on 6th street, and beceause of the poor ventilation of almost every loft (save those with more than one openable window in the unit) lofts in SF need AC much, much more often than they need heat. My heating bills here very low.
Posted by: Anonymous at October 22, 2006 8:55 AM
Am I missing something? At these rates, why would anyone choose to rent over an outright purchase, not necessarily of this property, but perhaps elsewhere?
Posted by: Sexy & Sassy in SF at October 26, 2006 9:01 PM
Anyone know the sq. footage on their Plan 3 models?
Posted by: SF bubble at November 7, 2006 3:49 PM