November 29, 2006
The Royal San Francisco: Under 20% Sold?
A peek into the windows of The Royal from a vantage point in the City Club seems to support speculation of fewer than ten closed condominium sales in the 46 unit Royal. And it's possible that those sales figures include five Below Market Rate (BMR) units.
And for those of you who have been following along at home, the owner of unit #604 remains "highly motivated," is offering to “pay 1 year hoa, parking, & gym membership,” and has reduced his/her asking price for a second time (now $769,000).
First Published: November 29, 2006 9:00 AM
Comments from "Plugged In" Readers
Wonder what the issues are? It doesn't strike me as having been perfectly conceived and marketed. The web site looks stodgy. Zero buzz. Small units. Close to $1,000/sf. Parking off-site. Moderate HOAs. Sub-optimal residential location.
Posted by: pwb at November 29, 2006 3:39 PM
I don't think the marketing is entirely to blame. The sales staff (consisting, I believe, of just one person) always has had a full schedule when I've inquired -- so they seem to have the ability to draw people in.
Little money has been spent on advertising, but since the target buyer is largely people who work in the area, does it make sense to have an expensive, wide-ranging advertising campaign? The focus should really be on people in the neighborhood, since if you don't work in the neighborhood why would you be drawn to living there? There's nothing wrong with the area, it's just not on anyone's map as a place to be.
If I had been doing the marketing, I would have invested money in hosting events-- making use of the rooftop garden area-- inviting people from all over the financial district. One big party, and then several smaller, private parties.
I also would have partnered with a corporate housing firm -- an Oakwood Worldwide (whose office is just two blocks away, or AMSI or someone), who would offer to do the rental and management of the apartments for corporate housing. Create a corporate housing package so that investors could buy them for the purpose of doing short-term rentals (which have much higher rents than normal rentals.) That is the PERFECT location for corporate housing and I don't think they'd be hard to rent for that purpose at all.
As for the product itself -- it's okay. Unfortunately for the Royal we're in a market where "okay" just isn't good enough at those prices. In terms of design, I would have gone completely Old World (in keeping with the building) or completely Modern, which would have created excitement. By taking the safe route, the product looks like every other condo, and simply doesn't give one a special reason to buy.
Posted by: Damion at November 30, 2006 12:05 AM
Haha! Corporate housing for investment. That's a good one. At those prices, even corporate housing won't pay the bills and when prices decline over the next several years, you'll sell for less than what you paid.
I think that answers the question as to why they didn't partner with someone for corporate housing.
Posted by: tipster at November 30, 2006 1:54 PM
But it makes more sense to do corporate housing at that site than conventional rentals -- you could rent a furnished one-bedroom as corp housing for over $3,000 a month. If there were several short-term rentals in the building, managed by the same company, you could place a representative downstairs, and provide maid service, etc..
Prices at The Royal aren't ridiculously high anyhow -- they're low 600s to high 700s, which is the market rate for one-bedroom condos.
Posted by: Damion at November 30, 2006 9:07 PM
Most condominium association do not allow short term rentals. If the CC&R's do not define the length of time for a rental, then usually within a year the HOA adopts rules requiring a mininium of a one year rental.
The location is across the street from a great hotel.
Short term rental of the Royal is not a long term solution.
Posted by: Frederick at December 1, 2006 6:16 PM