January 14, 2008

Reductions And Returns At The Ritz-Carlton Residences (690 Market)

San Francisco's Ritz-Carlton Residences (www.SocketSite.com)

Eight months after advertising “sold out” (at least with regard to the original 52 condos), just over 20% of the Ritz-Carlton Residences (690 Market) are officially back on the market. And at least seven of those original fifty-two are currently available through the sales office (which would suggest a contract fall out rate of at least 13%).

Of the twelve listings, three are for one-bedrooms: #1605 which is a resale and asking $1,497,000; #1705 which is a resale and asking only $2,000 more; and #1805 which is being offered directly from the sales office, but for $2,000 less ($1,495,000).

690 Market Street #2104

And while a price reduction on a resale unit is one thing (the list price on #2104 was just reduced by $252,000 (6.7%) after two months on the market), it’s another when the reductions are on units being offered through the sales office itself (the list price for #1103 has been reduced by $104,000 (4.5%) since hitting the MLS five months ago).

The Ritz-Carlton Adds Five More Private Residences (Now 57) [SocketSite]
∙ Listing: 690 Market #1605 (1/1.5) - $1,497,000 [MLS]
∙ Listing: 690 Market #1705 (1/1.5) - $1,499,000 [MLS]
∙ Listing: 690 Market #1805 (1/1.5) - $1,495,000 [MLS]
∙ Listing: 690 Market #1103 (2/2.5) - $2,195,000 [MLS]
∙ Listing: 690 Market #2104 (3/3) - $3,498,000 [Sotheby’s] [MLS]
Four More Listings! (And At Least One Reduction At The Ritz) [SocketSite]

First Published: January 14, 2008 3:30 AM

Comments from "Plugged In" Readers

Is there any information about the reasons that these sales did not go through? Did the financing fall apart? Did potential buyers walk away from their deposits because of a declining housing market (in the rest of the country of course, not in SF ;)

Posted by: kernelboy at January 14, 2008 7:05 AM

Resale prices have more weight than new sale prices. Regular home owners are much less likely to lower prices and take a loss than developers are (who need their capital more). Homeowners are willing to "ride it out" a lot longer than the builders.

SocketSide ed, you got the psychology impact of this story backwards. It's resales > new sales.

Posted by: scurvy at January 14, 2008 7:47 AM

If you go to the Caldwell Banker Residential Brokerage site, you will see 7 additional Ritz Carlton Listings.
#2202 $3.15m 1470 sq.ft
#1104 $2.495m 1960 sq.ft
#2101 $2.399m 1660 sq. ft
#1803 $2.295m 1510 sq. ft.
#1701 $2.090m 1545 sq. ft
#1603 $2.065m 1510 sq. ft.
#1502 #1.825m 1275 sq. ft.

Posted by: smk at January 14, 2008 8:43 AM

What idiot -- erh, multimillionaire would pay multimillions for a ... timeshare?

Posted by: S&S at January 14, 2008 8:54 AM

why are these all so expensive?

Posted by: tom at January 14, 2008 8:57 AM

Probably some Europeans or Candians who look at our currency as monopoly money.

Posted by: SmugCloud at January 14, 2008 9:01 AM

I am pretty sure these are not timeshares. They are individual condos.

Posted by: JJ at January 14, 2008 9:19 AM

From the website, 44 of the units are being sold as timeshares, and 57 as condos. The units listed above are condos.

Posted by: Dan at January 14, 2008 9:56 AM

Actually you all are wrong. There are different types of ownership including FULL ownership. I know this because my parents recently bought a place on the 13th floor. My mother bought the place in raw condition and is doing her own build out as she is an interior designer. For an investment standpoint, the condos will be worth double 5 years from now. If you need further information, contact the Ritz sales staff directly.

Sincerely,

Greg Fox

Posted by: Greg Fox at January 14, 2008 10:08 AM

"For an investment standpoint, the condos will be worth double 5 years from now."

Based on....what? You do realize that, in order for something to double in 5 years, it needs to appreciate by nearly 15% each year, right? And the developer is lowering prices by 5% in year 1 already. Which means you now need 19% annual appreciation in years 2-5 to double.

Posted by: Dude at January 14, 2008 10:18 AM

It's sort of like the weather in San Francisco. It can be 60 degrees at the Ocean and you are head down, walking agaisnt the blast of fog, freezing in your hoodies, while across town you can get a sunburn on Telegraph Hill. Micro climates. Or as we say at our house over the dinner table, at the gas pump, and whenever we wash out and reuse our band aids, "Chasity, the rich sure are different than than you and me."

Posted by: kathleen at January 14, 2008 10:27 AM

"For an investment standpoint, the condos will be worth double 5 years from now."

For your Mothers sake I hope this is true. Property value is predicted by many (i.e. Anderson School at UCLA) that property value in the Downtown region of SF to drop up to 8%. Thats on the assumptiont that SF tech and online advertising sectors continue to grow. Any econmic downturn could prove costly to more people than just your mother.

Posted by: RJ C. at January 14, 2008 10:35 AM

I'm not sure I'd pay $1 million to live on Market St even if I had the cash lying around. It would sting too much every time I looked outside & saw 50 people who pay nothing at all to live on Market St.

Posted by: bullmarket genius at January 14, 2008 11:09 AM

So when all the expenses are in, I guess it costs upwards of $10,000 a month with a 20% down payment to live in a one bedroom apartment, plus the cost of decorating. Wow, this is not for everyone, obviously. And this is projected to double in 5 years?!!!

Posted by: view lover at January 14, 2008 11:17 AM

I see that some folks are confusing timeshares and fractionals. Maybe I can dispell some notions people have about these products, based on an informal case study I did of the Marriott Grand Residence in Tahoe. From studying this property I've seen that price depreciation on fractional units is capped at around 50% (resale value compared to developer price) while timeshares around Tahoe have shown greater than 50% price depreciation. One explanation of the inferior price depreciation (ha!) of fractionals is their lower per week fees (which, in theory, are related to the fact that fractionals have superior "pride of ownership" and get used less than timeshares.) Because fractionals are fairly new products, it remains to be seen if they can hold their own against timeshares in the price depreciation derby. Please be aware that these results my not translate to the San Francisco real estate market as Tahoe is already built out and they are not making any more land up there. Price depreciation may vary by location.

Posted by: EBGuy at January 14, 2008 11:21 AM

The places looked dumpy. You'd think with that high HOA the RITZ could be a bit more RITZY.

Posted by: Michael L. at January 14, 2008 11:25 AM

I realize this discussion is about the condos, but believe that the fate of the condos and Club Residences (fractionals) are intertwined. Does any one know what the current asking prices are on the fractionals? The best I could come up with on the web is somewhat dated: Instead, buyers spend more than $250,000 for one-twelfth of a two-bedroom condo. Wonder if we'll see some of the condos converted back to Club fractionals?

Posted by: EBGuy at January 14, 2008 11:46 AM

EBGuy - Are you saying that investors in the Marriott Tahoe property have lost 1/2 of their investment? How does the cap work - is it a put back to developer? (Is Marriott the developer?) Can a new investor now buy a unit at 1/2 the original price? Thanks for the research on this.

I stayed at this Marriott a couple years ago. It was OK for a hotel room, but I can't imagine why anyone would want to buy into one. I guess I just don't get the hotel condo concept.

Posted by: FSBO at January 14, 2008 11:49 AM

For as long as I can remember, timeshares and (more recently) fractionals have been repurchased for around 1/2 of their original price.

In many places in the US, e.g. Palm Springs, there is a big time-share resale industry. You sell a timeshare that you no longer want and a third-party company buys it for 50% (or so, depending on desirablity) and resells it for more than that. So it sure doesn't sound to me like the Mariott Tahoe is unusual.

Posted by: anon at January 14, 2008 12:19 PM

How does the cap work
Sorry, the 50% depreciation limit was actually a joke based on the current lowest resale price I found for a 1bed/1bath quarter share ($110,000) compared to the developer price of ~$220k. They could go lower. Maybe the high, high end fractionals will not suffer this price attrition, but clearly the Marriott Grand Residence is not in that class. Oh, and they are building The Chateau across the street.

Posted by: EBGuy at January 14, 2008 12:19 PM

EBGuy: I believe the fractionals are 144K - 530K, depending upon location, as stated on their site. And perhaps you could enlighten me, but I really don't see any difference between a timeshare and fractional ownership (it's a matter of semantics to me) with the exception that resale price may be limited/restricted by the owner/developer (ultimately, the Ritz). The concept or method of ownership seems the same to me between a timeshare and a fractional.

For THE Ritz (and for the price), the building is horrifically ugly. And I SERIOUSLY doubt any unit in this building (or anywhere else in the Bay Area, for that matter) is going to double in appreciation in the next five years. But, hey, I'm not above admitting to being wrong ... IF/when that time comes.

Posted by: S&S at January 14, 2008 12:21 PM

EBGuy, I took your comment about depreciation cap on a fractional ownership as fact, so if that was a joke, then what IS really the difference between a fractional vs. timeshare? "Pride of ownership"??? Pffffft!

Posted by: S&S at January 14, 2008 12:26 PM

@ SmugCloud: Actually, you're right. My agent said her European clients are buying in SF ... in cash.

Posted by: S&S at January 14, 2008 12:37 PM

I think the web site may be out of date. I visited the sales office long ago and was told that the interest in the fractional ownership (aka timeshares) was too low and they had pulled the offering, refunded the money and reoffered those units as condos. This was maybe 9 months ago.

The guy at the sales office appeared to be somewhat clueless, so who knows if any of this is true.

In any event, it's good to know that prices are headed down on even new developments with GOOD locations. I shudder to think what is going to happen to one new development about to allow people to close with a less than perfect location near the freeway.

And S&S, your agent is going to tell you whatever she can to make you hurry up and buy at the highest possible price. That's her job.

The reality is that most Europeans with any financial savvy will tell you they are staying away from anything dollar denominated right now.

Posted by: tipster at January 14, 2008 12:48 PM

what IS really the difference between a fractional vs. timeshare?
The fractional presents a superior price depreciation model (less IS better). All kidding aside (ha!), the Marriott Grand Residences current offering (5 week winter peak, 5 week summer peak, or three week off season) is kinda like the "missing link" between fractionals and timeshares. The five week intervals go for somewhere around timeshare prices (~20k/week) and the 3 week off season lists close to the quarter share fractional prices (~10k/week).

Posted by: EBGuy at January 14, 2008 1:38 PM

what IS really the difference between a fractional vs. timeshare?

Fractional you get a deed of the property at 1/12 (or whatever slice you purchase)and about a month for each slice. For timeshares, you don't get a deed and you don't own a percentage of the unit. What you have is the right to use a spcific unit plan, for a spcific amount of time during the year.

Posted by: Andrew at January 15, 2008 11:05 AM

Another difference with Timeshare vs. Fractional, is with Timeshare you are really buying time, not real estate. You can only visit your Timeshare for the time you purchased. They tend to be in less desirable locations with limited to no services and amenities. Look at the supply and demand for resale; there are tens of millions of Timeshares available only a few thousand Fractionals. Also with a Fractional you purchase a Fee Simple deed. (deeded in perpetuity) Just like buying full ownership execpt a fraction of it. You can go to your fractional whenever you want, like a second home. It is very flexible. The services and amenities are 5 star and offer private chefs and waiters and house cars with drivers. Really the only way they are similar is that you don't live there 100% of the time and are considered a luxury item or lifestyle. Not all Fractionals have depreciated. It all goes back to the Developer/Brand and location, location, location.

Posted by: Cali at January 15, 2008 2:00 PM

"You can go to your fractional whenever you want, like a second home. It is very flexible."

How can you do that, if there are 11 other owners?

Posted by: Dan at January 15, 2008 2:15 PM

Even though you are deeded a particular home, you have the right to use any of them.

Posted by: Cali at January 15, 2008 2:44 PM

What’s even more frustrating is the fact that the Ritz Carlton keeps part of the buyers deposit if they back out and then goes after the Agent to get the partial commission they paid back from them.

Posted by: Frustrated Agent at January 15, 2008 6:07 PM

Not all Fractionals have depreciated.

For the record, Ritz Carlton and Marriott don't even talk about the possibility of appreciation on their websites any more (during the height of the bubble, it was at least mentioned in passing). I did see a blog a couple of days back that claimed a Ritz share was resold at a profit, but I am extremely skeptical. So, if not all fractionals have deprecicated, I say prove it. I have seen newspapers repeating marketing $%^&@! from developers and I say show us the property records. And I grant you, if anything holds its value (or holds out the longest), it will probably be the uber-high end stuff which consists of resort homes in exotic locals. BTW, in my fractional vs. timeshare discussion, I referring to deeded interests for both, so I don't consider that to be the differentiator.

Posted by: EBGuy at January 15, 2008 7:24 PM

Every project is different and every location is unique. The bottom line is that fractionals are the wave of the future is gaining access to luxury assets. The statistics are clear, sales of fractionals have risen while everything else is falling. If you want to learn more about fractionals, look at the new website - The Fractional Concierge (www.TheFractionalConcierge.com). They list ALL assets sold as fractionals and have prices and descriptions.

Posted by: Daniel Giannini at January 21, 2008 7:31 AM

Okay, here's a resale data point for the Ritz. Please note, you should should finish eating or drinking before continuing.

$285000 Ritz Carlton SF (financial district)
21 day fractional ownership for sale in the brand new, spectacular San Francisco Ritz Carlton Residences in the heart of the Financial District. Deeded rights to a large 2 bedroom, 2.5 bath residence. No days have been used and this price is $10,000 under what you will pay today through the Ritz program, if you can find availability. Perfect for executives, retirees or others traveling to San Francisco on a regular basis. Owners lounge and full amenities. The 21 day ownership can be used in one day increments, no minimum stay required. As a bonus, you can use the allocation at similar Ritz Carlton properties around the world. Owners also have the right to lease additional days at extremely attractive rates (under $200 per night!). No days have been used in 2008. Seller has change of plans and is prepared to move quickly.

http://sfbay.craigslist.org/sfc/rfs/541584351.html

Posted by: EBGuy at January 22, 2008 3:37 PM

We have a slot to buy a residence full ownership condo at Kapalua Ritz Carlton. One bed starting at $895,000.00. I believe the maintenance and other fees may be quite high, but have no information on that yet. They are selling on a sort of "lottery" basis. This is a high end, very popular Maui destination. Prices for a view condo in very good condition on Maui run $1300 to $1600 per foot in similar location. Lowest start price for Ritz represents approximately $1021 per foot. Seems like large money chases these types of units. Will these suffer the fate of SF and other whole ownership and fractional units?

Posted by: david traino at January 23, 2008 8:11 AM

Another price reduction... I am shocked, to say the least.
Two bedroom two and a half bathroom ownership unit includes twenty one days of use guaranteed plus space available usage days and interchangeability between other ritz carlton clubs worldwide. Shares are currently being sold for over $300,000- what a steal at $260,000!
http://sfbay.craigslist.org/sfc/rfs/562854858.html

Posted by: EBGuy at February 11, 2008 3:10 PM

I got pitched a few months back to buy some bonds related to the this Ritz project, bonds tied to a "non-profit" that funded the seismic retrofit (basically a scam IMO to funnel tax dollar subsidies to "glamour" projects). Here is the series:

$11,000,000
ABAG Finance Authority for Nonprofit Corporations
Community Facilities District No. 2004-1
(Seismic Safety Improvements -- 690 and 942 Market Street Project)
Special Tax Bonds
Series 2007A

I went through the numbers in the "prospectus" (I'll look for an online version and post the link if I can find it). The takeaway is that this project does not have a lot of real cash behind it. Ongoing renovations are being financed out of sales proceeds and the coverage ratios are very weak.

But more importantly, the prospectus detailed the selling efforts of the residences and the fractional units and they are NOT exactly flying off the shelf. In fact, the fractional stuff is turning into a nightmare for the developers, and they are cutting it back. Don't believe the hype of the REIC salespeople. Go to the offering documents for projects like this to get the true picture. The fear of the SEC is the only thing that gets these guys to admit the truth. I'll go look for the numbers and post the link (or at least the numbers from my offering circular/prospectus) a little later.

Posted by: Satchel at February 11, 2008 4:17 PM

As promised, here is the link to the offering circular for the Ritz Carleton special tax bonds:

http://www.sybonds.com/oslib/doc/ABAG_CFD_No_2004_1_Market_St_Project.pdf

Note the disclosures regarding sales and ACTUAL deposits received (as of October 2007) on pp. 31-32, including the disclosures regarding how the ongoing fractional conversions need to be financed out of sales of existing fractionals (this isn't tremendously unusual, but the fact that there is no financing in place for such a large percentage of the fractional units is IMO).

These bonds were placed retail, and obviously I am not making any recommendation for any potential investor. I didn't buy any, and I think they priced around 7.75% - VERY high for a "tax-free" type municipal. Draw your own conclusions, and obviously consult with your own broker or financial advisers regarding any potential investment decision (don't trust random anonymous bloggers!).

Posted by: Satchel at February 11, 2008 4:36 PM

Just to be clear, the Ritz Carlton special tax bonds are (or more accurately, claim to be) exempt from California state income tax, but not federal income tax.

Posted by: anontax at February 11, 2008 6:31 PM

anontax is right I think - I forgot about that (it's been a while). Still, pretty juicy yield for the marginal ~9-10% marginal tax payer in CA (and that's just about everybody). I do want to stress that I don't have any inside info on this development or the financing - just what I gleaned from the offering circular. I remember doing some back of the enveope analysis at the ytime, and concluding that the deal didn't appeal to me, but if any real micro-analysts (I'm a macro- guy) have any insight into the numbers procided in the document, I'd love to hear any analysis!

Posted by: Satchel at February 11, 2008 6:57 PM

Having considered all of these WONDERFUL discounted 'deals', we have decided to go and buy.
Where? In Brazil: a beach villa with no road in front, 3 bedroom suites, for about USD 200 per square foot. And right in front fresh fish, and 12 oysters for just one USD.

Posted by: Mary-Ann at February 15, 2008 4:49 AM

Looks like 942 Market was just approved.

Posted by: tloin at March 25, 2008 9:22 PM

Here is another Craigslist post "discounted" from the developer price: http://sfbay.craigslist.org/sfc/rfs/670631437.html
$199000 Deeded 1/12 Fractional Interest 1BD at Ritz Carlton Club San Francisco

Currently selling for $240,000 from the Sales Office, you could save some money and enjoy all the amenities of owning at the newly built Ritz Carlton Club at the corner of 3rd Street and Market Streets, in the heart of San Francisco, near Union Square, the Embarcadero, Four Seasons, St. Regis, Moscone Center, nightlife, entertainment and much more.
You would get 21 guaranteed days per year (you could switch them with the other Ritz Carlton Clubs around the world) and you would have valet parking, of course! You could also book additional nights at a deeply discounted rate, in addition to having discounts at most Ritz Carlton Hotels around the world!
Your property is deeded in fee simple, and could be transferred at anytime. You pay your own property tax to the City of San Francisco and you pay a monthly maintenance fee of about $1,000 to the Ritz Carlton.


So if I read this correctly, you are paying ~$570 per night in "maintenance fees". What a deal!

Posted by: EBGuy at May 6, 2008 4:48 PM

For the record, here is a 3/3 at the Ritz. At least this one has the "archictecturally interesting" windows.
GREAT NEW PRICE! Reduced to $350,000
There are ONLY two -3 bedroom/3bath fractional ownerships currently available at the Ritz Carlton Club. 1/12th deeded ownership offers minimum 21 days use per year, unlimited space-available per diem days, reciprocal use at other Ritz Carlton Club Resorts PLUS discounted/upgraded stays at Ritz Carlton hotels!

http://sfbay.craigslist.org/sfc/rfs/692222546.html

Posted by: EBGuy at May 23, 2008 6:14 PM

Does anyone know what the penalty is for backing out of a contract with the Ritz Carlton Club? I assume that the deposit will be forfeited, but would backing out of the contract affect one's credit rating?

Posted by: Susan at July 8, 2008 9:48 PM

So if I read this correctly, you are paying ~$570 per night in "maintenance fees". What a deal!

yes, and much less flexiblility on dates than hotel room...in few years people will liquidate on ebay at any price.

Posted by: indigo at July 13, 2008 6:09 AM

I'm actually going to stay at the 3 bd 3 ba this weekend at the sf Market st Ritz. My mom has the fractional share and let me tell you, it is a pain to book the rooms. They are always full for some reason, and they require you to stay 2 nights min, and encourage you to stay on week days vs. weekends. We'll see how the rooms are.

Posted by: panda lover at November 19, 2008 4:33 PM

Here is another Ritz fractional on Craigslist. Around $10k off from another listing early this year. The units go for $309k from the developer.

Club 2 bedroom 1/12 fractional interest
$249,000 Ritz Carlton SF (financial district)
21 day fractional ownership for sale in the brand new, spectacular San Francisco Ritz Carlton Residences in the heart of the Financial District. Deeded rights to a large 2 bedroom, 2.5 bath residence. Perfect for executives, retirees or others traveling to San Francisco on a regular basis. Owners lounge and full amenities. The 21 day ownership can be used in one day increments, no minimum stay required. As a bonus, you can use the allocation at similar Ritz Carlton properties around the world. Owners also have the right to lease additional days at extremely attractive rates (for as little as approximately $200 per night!). Seller has change of plans and is prepared to move quickly and can be reached at 402-476-7700

Posted by: EBGuy at December 4, 2008 10:48 AM

Still falling...
Ritz-Carlton Club in San Francisco
2 bedroom 2 ½ Bath
This is a Fractional 1/12 Interest with 21 days use each year. Has reciprocal use to other Ritz-Carlton Clubs. The Shares are currently selling for $309,000. We're going to sell this interest for $240,000 if interested please call Vernon Thomason at (408)210-2979 or (408)918-9100 tell them you are calling about the Ritz-Carlton Club

Posted by: EBGuy at February 5, 2009 11:35 AM

Ritz Carlton #1605 now asking 1.125, $372K off, 18 months later. $1,071 psft, asking. Down 25% from 18 months ago. At 100 DOM, I suspect it might go for less. The indignity of only getting $1000 psft! How the mighty have fallen

http://www.redfin.com/CA/San-Francisco/690-Market-St-94104/unit-1605/home/12108552


690 Market St #1605 San Francisco, CA 94108
Price: $1,125,000
Beds: 1
Baths: 1.5
Sq. Ft.: 1,050
$/Sq. Ft.: $1,071
Lot Size: -
Property Type: Luxury, Condominium
View: City Lights, Water, Bay, Downtown
Community: Financial District
County: San Francisco
MLS#: 353926
Source: San Francisco MLS
Status: Active
On Redfin: 100 days
This 1BR/1.5 BA at the Ritz Carlton offers the best value of any unit available at The Ritz. Inlaid marble entry transitions to dark hdwd throughout the living areas. The kitchen is fully upgraded with all viking appliances including a wine fridge, granite counters and rich wood cabinetry. The living area offers nearly wall to wall windows with city and bay views. Amenities include full service concierge, valet pkg, business facilities, gym, Residents' Lounge.

Posted by: tipster at June 20, 2009 6:21 PM

tipster, you forgot the best part: HOA fees are $2,295 per month.

Posted by: EBGuy at June 20, 2009 9:44 PM

The bottom line is that fractionals are the wave of the future is gaining access to luxury assets.
Well this is shocking I tried going to www.thefractionalconcierge.com only to find out that "This domain has temporarily been disabled." I sure this is only a temporary setup for Mr. Giannini.

Posted by: EBGuy at June 20, 2009 9:53 PM

The bottom line is that fractionals are the wave of the future is gaining access to luxury assets.
Well this is shocking I tried going to www.thefractionalconcierge.com only to find out that "This domain has temporarily been disabled." I sure this is only a temporary setback for Mr. Giannini.

Posted by: EBGuy at June 20, 2009 9:53 PM

"The bottom line is that fractionals are the wave of the future ..."

... and always will be.

Posted by: diemos at June 21, 2009 6:13 AM

Basic question: if you have a 1/12 fractional why do you only get 21 days instead of 30 days? What invisible partner is taking almost 10% of your investment? Why do they call it 1/12 instead of 1/17??

Posted by: sunnyvalesteve at June 21, 2009 12:25 PM

Another basic question I have is why do they advertise these type of units as being similar to a luxury hotel experience, when you could stay in the hotel for 21 days a year for about $$8500 without the HOA charges? Wouldn't one year of HOA dues and taxes be equeal to 21 days in any fine hotel?

I see the same thing in Hawaii and it makes no sense to me. Properties and beaches can go out of favor within 15 years as luxury travellers move on to the next new place. While everyone has left Kapalua and Kaanapali for Kukio and Hualalai, time share owners are now stuck in 25 year old buildings that were state of the art for their time, but now seem tired and dated.

Posted by: anon94123 at June 21, 2009 2:32 PM

Trouble in Camelot (see Scott B. Rindner)? The pied-a-terre is, evidently, the first to go. According to PropertyShark, Unit 201 at the Ritz is headed for the auction block on October 8. The 2bed/2bath (1515 sq. ft.) unit was purchased for $2,173,000(!) in Dec. 2007. With an unpaid balance of $1,575,937, it appears that Chase is left holding the short straw.

Posted by: EBGuy at September 21, 2009 11:24 AM

"If you go to the Caldwell Banker Residential Brokerage site, you will see 7 additional Ritz Carlton Listings.
... #1502 #1.825m 1275 sq. ft."

I'm pretty sure you can get that last one about 33% cheaper. It's listed on Zephyr (as bank owned) for $1.275.

http://www.zephyrsf.com/financial-district/690-market-st-17

Posted by: tipster at April 19, 2010 4:13 PM

You can now rent these for about $2500, plus the property tax and HOA. Fully furnished!

$5950 / 2br - 2ba +Den *Ritz Carlton* 1382sf 15th Flr Furnished View Condo w/Parking (financial district)

http://sfbay.craigslist.org/sfc/apa/1916691446.html

Assuming $700 psft, a 5% mortgage would run $2900 after taxes, so the equivalent rents are pricing these just shy of $700 psft. That's less than half of their 2008 list prices.

My favorite comment from above:

For an investment standpoint, the condos will be worth double 5 years from now. If you need further information, contact the Ritz sales staff directly.

Sincerely,

Greg Fox

Posted by: Greg Fox at January 14, 2008 10:08 AM

How funny was that!

Posted by: tipster at August 25, 2010 8:48 PM

"@ SmugCloud: Actually, you're right. My agent said her European clients are buying in SF ... in cash.

Posted by: S&S at January 14, 2008 12:37 PM"

What a blast from the past. Do you remember when rich foreigners were going to save the SF market?

Good times.

Posted by: diemos at August 25, 2010 9:01 PM

Rental above is reduced to $5750. You are paying HOA, property tax and $2300 for a large 2/2 with a den, furnished, at the Ritz Carlton.

$5750 / 2br - 2ba +Den *Ritz Carlton* 1382sf 15th Flr Furnished View Condo w/Parking (financial district)

http://sfbay.craigslist.org/sfc/apa/1920447456.html

They are dropping in value more than $5750 per month and this guy wants to rent it furnished for that price. Sell, dummy!

Posted by: tipster at August 26, 2010 10:24 PM

He probably has a good enough job to subsidize a renter to the clip of more than 4 grand!

In some circles they call that a sugar daddy.

I call that an accidental landlord.

I need one of these. My rent would be free.

Posted by: lol at August 26, 2010 10:33 PM

Now you can get one for 5250 Unfurnished. HOA, property tax +$2000

$5250 / 2br - Ritz Furnished/Unfurnished Condo & Parking

1,275 square-feet (approximately)

2 bedrooms

2.5 bathrooms

http://sfbay.craigslist.org/sfc/apa/1958307081.html

Posted by: tipster at September 20, 2010 1:26 PM

So 1603 was listed for 2.065M in January of '08.

1503, one floor below has been asking 1.550 for a month.

Fast forward to October '10. #1703, one floor above, is asking (and will no doubt take less) $6000 to rent. 2620 is HOA, property tax is 2000.

So they are asking property tax, plus HOA plus $1380 to live in a 1510 square foot unit with views from every room at the Ritz Carlton. Designer window coverings included at no charge. Just the interest at 5% on a $2M loan is over $8,000 and they just want $1380. Niiiiccceeee!!!

From the craigslist rental listing:

Reduced for immediate rental and occupancy! You will love the experience and service ... This is the most sought after, southwest corner unit at San Francisco's premier luxury condominium high-rise building, the Ritz Carlton Residences, located at 690 Market Street #1703, at 3rd and Kearny Streets. VALET parking IS INCLUDED for one car inside the building. Additional spaces are available for rent monthly. The building has 24 hour security, concierge service, doorman, fitness center, lounge, DAILY continental breakfast IS INCLUDED. The use of the House Mercedes Car is available nighly at no additional charge, which will drop and pick you up within a couple miles radius.

This corner unit has Downtown, City and Bay views from EVERY window, from EVERY room. Plenty of light fill this unit.

The unit has 1,510 square feet, 2 Bedrooms, 2.5 Bathrooms ... Ebony hardwood floors, carpet in bedrooms, crown molding throughout, in-unit laundry, chef's kitchen w/all Viking appliances, gas cooking, marble bathrooms, central air conditioning, central heating, 9.5 feet ceilings, and designer window coverings.

Posted by: tipster at October 20, 2010 12:34 PM

^Whatdyano, #1703 is now listed for sale. It won't rent for $6000, but someone should pay $1.6M for it, just because.

If it sells for $1.0M, the after tax costs will be about $6,000 per month. It couldn't rent for that.

That will mean prices are down about half.

Posted by: tipster at October 21, 2010 1:28 PM

$2620/mo HOA for valet parking, doorman, daily continental breakfast, and riding the house Benz to restaurants and bars. I can't see how you could go wrong with that. The economic model is brilliant for these places if you can find enough suckers.

Posted by: sfrenegade at October 21, 2010 2:38 PM

1503 now down to $1.495. Recall 1603 had been listed for 2.065M

Posted by: tipster at November 5, 2010 5:43 PM

Ritz Fractional. $232K in '08, now offered for $110K.

$232K makes this the low end right? It's on a busy street.

http://www.redfin.com/CA/San-Francisco/690-Market-St-94104/unit-302/home/21967292

Posted by: tipster at December 23, 2010 10:29 PM

ninny already explained about "interchangeable luxury condos". And this is interchangeable luxury condo SQUARED. Case closed. Right, ninny?

phew, it's a mouthful, that phrase.

Posted by: your equity will be assimilated at December 24, 2010 7:48 AM

these things didn't even fly during the boom. i'm wondering if this business model will be left high and dry in other locales where they tried it?

anyone know any more stories about high end fractional?

[Editor's Note: On Tour As New Déjà Vu: Odeon Penthouse (181 O’Farrell #513).]

Posted by: anonee at December 24, 2010 8:38 AM

"these things didn't even fly during the boom."

Not true. In 2007, within 3 months, they sold 10 of the 12 shares for the one unit I posted above.

Sales were pretty brisk, but then the economy started turning down and the handwriting was on the wall, so sales slowed and then stopped altogether.

Posted by: tipster at December 24, 2010 11:29 AM

as i said-they were unable to really get full buy in on these and other worldwide fractional offerings. i have not really looked into it but i remember some fellows touting starwood resort stuff in mammoth and high end beach houses in santa barbara. to my knowledge these projects all suffered pretty anemic demand.

imo, these types of ventures will be case study poster children in a retrospective glance at the end of the bubble era.

Posted by: anonee at December 24, 2010 12:58 PM

Bank Owned Unit at the Wonderful Ritz Carlton Residence Building

Based on the property tax, i think this "interchangeable luxury condo" is off about 40-50%. Aninee?

Posted by: Your equity will be assimilated. at December 24, 2010 1:04 PM

so they are asking $831/sq.ft now-which is outrageous enough- but you are saying this thing traded for north of $1,500/sq.ft? that would be a pretty spectacular loss if so.

Posted by: anonee at December 24, 2010 1:32 PM

where did my stalker go? what happened to your comment? did these really trade north of $1,500/sq/ft. at one time?

Posted by: anonee at December 26, 2010 8:56 AM

OMG this thread is a hoot. The guy up near the top talking about how his decorator mother bought one of these and was going to double her money in 5 years is my favorite. It really captures the entire essence of that era - a big bunch of amateurs playing with fire who got burned. All of them were so sure it was going to work out in their favor and only the smart, experienced ones didn't get completely screwed, though even a few of them got caught swimming naked when the tide went out.

The bank owned unit described a few posts above this one was purchased (and lost) by realtors for $1434 psft. They didn't just spout kool aid: they drank it. Every last drop. They even licked the paper cup, right before the poison took hold.

The fact that people listened to a bunch of uneducated salespeople for their investment advice should have been the first hint this was going to end badly. Treat every word as a complete lie by someone completely clueless. You'll be a lot closer to the truth.

This is basically a slow motion train wreck. And in case you feel like jumping on a slow motion train wreck because the first of the damage has already been done, think again.

Posted by: tipster at December 26, 2010 2:01 PM

so this is a slow moving train wreck on the way to a bloodbath huh?

Posted by: anonee at December 26, 2010 2:14 PM

No need for stalking, guys. It's just a blog.

anonee, according to Property Shark, several of these units sold for around $1,400 psf in the frothy days. Check out the current listings. #1101, for example, is listed for $780 psf, implying at least a 40% drop. #1704 sold for $2.8 million in 2007 - $1,358 psf for an empty shell - and is now listed for $1.9 million. A million dollar loss over 3 years, and down 33% if it can sell at asking.

If it's not a train wreck or bloodbath, what metaphor would you use?

Posted by: Legacy Dude at December 27, 2010 10:56 AM

"If it's not a train wreck or bloodbath, what metaphor would you use?"

I've heard "surprisingly strong" and "surprisingly resilient" used to describe SF a lot.

Kind of like when realtors describe homes as having "good bones" or "cozy."

Posted by: A.T. at December 27, 2010 11:07 AM

legacydude,
i was merely commenting that tippy has described the market endlessly; sometimes we are rushing towards bloodbaths and cliffs and facing tsunamis-this time he has styled it as slow moving.

as far as this property goes i agree that people got their a$$es handed to them. same for those who paid so outrageously for the four seasons.

i was amazed that so many developments targeted this hi high end. i believe alot of the reasoning had to do with comparable properties in super expensive hi rises in shanghai, hong kong
and new york.

Posted by: anonee at December 27, 2010 6:20 PM

I think what tipster does sometimes is hold a mirror to the rhetoric that was propounded by a good majority of the real estate sales force in the bubble years and beyond.

I don’t think his metaphors are any more preposterous than those used by agents themselves – they’re just the flipside.

He may not always be right, but he’s not going to be as wrong the guy above who said in 2008 these units will double in value 5 years. They're closer to the opposite.

By taking the other side in the propaganda, it highlights the need of a balanced arbiter to point out the pros and cons of the largest purchase most people ever make and the sober consequences of unconsidered leveraged financial decisions.

Posted by: AMiR at December 28, 2010 2:09 PM

Down about 50% from peak for these condos would be about right. The suckers really got their a$$es handed to them here....

- el bombero

Posted by: El Bombero at December 28, 2010 2:17 PM

I get a particularly good chuckle from this January 2008 comment above (and not at the grammar -- blog postings get some slack on that):

"Property value is predicted by many (i.e. Anderson School at UCLA) that property value in the Downtown region of SF to drop up to 8%"

Recall that until recently the notion of an 8% drop in SF was considered a laughable, nearly unfathomable catastrophe. Now people look at a 20% off peak sale and say "whew, pretty good result for the seller." And they're right, considering the SF market as a whole!

Posted by: A.T. at December 28, 2010 2:23 PM

#2301 sold in 2008 for $2.201500, now listed for 1.350. $850K plus another $67K in commissions gone in 3 years. That has to be some sort of record.

The owner is a banker at a large bank, and the owner paid cash, so the loss is going to be all his. $900,000.00+ has to hurt.

Posted by: tipster at November 22, 2011 11:36 AM

tipster, Don't forget to add in $100k in HOA fees. That should put it over $1million.

Posted by: EBGuy at November 22, 2011 12:01 PM

Oh dear, I do hope that Greg Fox's mom is ok - she was counting on her investment to double by 2013, and it now looks like it's going to halve instead.

(See Posted by: Greg Fox at January 14, 2008 10:08 AM)

Posted by: El Bombero at November 22, 2011 2:44 PM

Posted by: SocketSite at November 22, 2011 3:03 PM

Poor Mrs. Fox... ouch. Maybe her interior design business or other investments are doing well in these times...

Posted by: Oakland Chap at January 31, 2012 9:22 AM

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