December 29, 2008
Back Forward To Beacon Two-Bedrooms Asking Under $600,000
A tax assed value of just over $750,000; a recorded sale back to the bank three weeks ago for $629,142; and a two-bedroom/bath condo at the beacon that’s now asking $599,900 (and touting “Offers anytime!”). Yes, it's 250 King Street #266 and almost the end of 2008.
∙ Listing: 250 King #266 (2/2) - $599,900 [MLS]
First Published: December 29, 2008 8:30 AM
Comments from "Plugged In" Readers
Who knew that the solution to our "affordability problem" was to take away the crazy loans?
Posted by: diemos at December 29, 2008 8:51 AM
But with a $800 HOA we're still not on rent parity. Plus there is the fact it is leased land.
The price needs to go down another $100k-150k to make up for that high HOA.
Posted by: Jay at December 29, 2008 8:55 AM
^^^The Beacon is on leased land? Who owns the land? That isn't the arrangement for other buildings in the area.
Posted by: Brutus at December 29, 2008 9:09 AM
The group that bought the property from Catellus obtained an option to buy-out the lease at a stated point in time at an agreed price. Before the first unit was sold, money was escrowed to pay the ground rent and the eventual lease buy-out. Not doing so would have made unit sales very difficult to finance, even in 2005.
If the purchase option has not yet been exercised, it will be soon. For all practical purposes, the ground lease is a non-issue.
Posted by: SausalitoRes at December 29, 2008 9:25 AM
Add another couple of floors to the location of the listing and this will get interesting.
The 3% commission isn't going to win friends in everyones favorite industry.
Posted by: Observer at December 29, 2008 9:48 AM
Hmmm....I'm not a big fan of the Beacon, and the HOA fees are high. With that said, I'm going to go out on a limb and say this goes for over asking.
BTW, does anyone know when this unit last sold and what the selling price was? I'm guessing the tax assessed value is higher than the last selling price.
Posted by: Lance at December 29, 2008 10:01 AM
I was walking by what I think was the "sales office (?)" on the first floor and there was a notice posted in the window. I read it very quickly, but the basic message was that certain services would either be scaled back or dropped due to a deacrease in a certain type of reserve (or mony coming in). Like I said, I read it quickly in passing. I'm not at all sure what, if anything that means to the current residents/owners and potential buyers.
Posted by: Can't think of cool name at December 29, 2008 10:09 AM
This property and these finishes have not aged gracefully.
With an $800 monthly HOA (plus some additional salt in that wound in the form of $100 per month leased parking fee), pending (I think) litigation, and a kitchen that would make me want to mix arsenic into my dinner, this will not sell at asking and may be quietly withdrawn in a few months.
Posted by: Foolio at December 29, 2008 10:18 AM
Rent on this would likely be about $3000-3200
At 5%, the mortgage payments and property taxes would run $3100, plus $900 for HOA and parking, so it doesn't come close to cash flow positive for an investor. And rents are heading down.
But for an owner occupant, it can run about $2500 per month.
The downsides are, of course, the likelihood that property values fall and you lose $100K and the near certainty that as people default on the HOA, the building falls into disrepair, or your HOA fees go way up or both.
These downsides probably don't justify the $500-$700 per month savings, as in the next year, you will almost certainly see a decrease of the $6-8K you saved.
However, that said, I think there probably has to be one person who will throw caution to the wind and take it for something very close to asking. They'll put virtually nothing down and get an FHA loan for a couple of hundred dollars more per month, and figure if it goes down by too much, they'll just walk away. It's only going to run about $20K for the downpayment. I think there are still people stupid enough to do this. It only takes one.
Posted by: tipster at December 29, 2008 10:34 AM
Well, I doubt it gets withdrawn as this is bank owned: this thing has to sell. I'm pretty sure I've seen this place before - wall colors are fairly unique. There's nothing wrong with this unit that a weekend of roller work and $100 at Home Depot won't fix. I don't mind the kitchen myself, but I'm just an amateur gourmet and not Emeril.
However, there are a ton of 2-bedrooms for rent at the Beacon ranging from $3,500 to $4,500/month. In fact, the unit directly upstairs from this one is asking $4,500/month:
Bet they'd take $3,500 given the competition:
Tipster is right: at $599K and market rent of $3,500K, you're actually pretty close to breakeven on a buy vs. rent by my back of the envelope math. You run the risk of both rents and prices falling in the next 1-2 years, but this may make sense for a long-term "end user" as currently priced.
Posted by: Dude at December 29, 2008 10:44 AM
I wouldn't rent this at $3500 (or even $2500), but maybe I'm underestimating its appeal.
And I absolutely wouldn't buy it for anywhere near $600k. But, as you say, it only takes one.
Posted by: Foolio at December 29, 2008 11:00 AM
The Beacon is no longer on leased land. The purchase option was exercised on an accelerated timeline more than 1 year ago. Everyone owns a fee interest now.
The building interior is undergoing a major makeover. This unit will sell for much more if they can wait until March when the makeover is completed.
Posted by: steve at December 29, 2008 11:31 AM
Renting at the Beacon is not bad but owning an unit there can be troublesome. Can't think of a cool name was correct, that the Beacon is having some serious problems with their HOA fund. I also noticed the letter posted on the glass that stated that they were going to cut services (ie: security, janitorial, trash etc) due to the problems with the HOA. If people are really paying around $800 not including parking and their reserves are short, what happens in the next few years when other problems arise?
$599k is fair for this unit and I think rent could be around $3,300 for the investor. I can't see a 2 bedroom in Mission Bay with a pool, gym, doorman and parking going for less than $2500 in the near future.
Posted by: j at December 29, 2008 11:32 AM
The reserves are not short and there are no problems with the HOA fund. The HOA was withholding funds payable to the retailer association because of a dispute. The notice was posted by the retailer space owner as a tactic to get the HOA to make payments before the dispute is resolved.
Posted by: Bored at December 29, 2008 11:41 AM
worst. pictures. ever.
$800 HOA and $100 leased parking? pass.
Posted by: tony at December 29, 2008 11:52 AM
This is interesting... the comments on this site regarding pricing recently have centered on values as they relate to prior years (will we get back to 2002 or 2000, and so on). Rarely has a property been even close to "penciling" in the traditional sense. I wouldn't rent here for higher than $2,500, but I'm sure some will fork out $3K or so, making the rent/buy situation more intriguing. Some would argue equivalent.
I've been waiting for the conversation to turn towards pricing as it relates to INCOME, which is, you know, how things worked until about 2002. 20% down at this price gets you to about $4K per month total. 30% DTI implies an income of $160K, which would make the buyer a pauper compared to other SS readers (if these comments are to be believed). This begs the question - how many DINK's or singles are out there with this kind of assets/income that would want this place?
Posted by: Who's Afraid of the Business Cycle? at December 29, 2008 11:54 AM
Well, this is just petty of me, but the paint colors would make me run away. I don't think the kitchen is so bad as someone else mentioned, but who decided to paint every room a different color? Also, didn't think much of the views.
Posted by: dkzody at December 29, 2008 12:36 PM
How does this unit have views of "city lights" as the MLS record states. I always thought that a "city lights" meant that you saw the lights of buildings several blocks away. From this 2nd floor unit, you can see buildings across the street but no further.
Is there an objective explanation of what a "city lights" view means ? Or is this a meaningless attribute ?
And I agree that these are pretty poor photos. What on earth does the last photo (16/16) depict ? "Here is the view that you get when crossing the street." ?
Posted by: The Milkshake of Despair at December 29, 2008 2:19 PM
It's hard for me to imagine who finds living at a place like the Beacon the best option for him/her. Living in a giant condo complex is okay if you are still a starving student, or in managed care, but are there any real advantages in adulthood? And are they worth $800/mo?
For the same price as that place, you could get a victorian place elsewhere in the city, in a decent to nice neighborhood, with actual architectural details, and real local businesses. On King you get mostly the T, traffic to/from 280, and a bunch of chain-style retail locations.
I could imagine renting this place as a law student at nearby golden gate, for example, or as a second place to live when you are too tired to travel all of the way to your Saratoga estate, but as an SF resident with enough capital and income to buy, why pick this?
Posted by: rr at December 29, 2008 3:30 PM
"...but as an SF resident with enough capital and income to buy, why pick this?" -- convenience.
Posted by: bored at December 29, 2008 3:41 PM
800 bucks HOA for this place seems a bit over the top? I mean...what are you getting? Does that include some sort of adult services once a week?
Posted by: cooper at December 29, 2008 4:40 PM
Maybe not everyone enjoys the same kind of lifestyle that you enjoy.
Posted by: g at December 29, 2008 5:42 PM
I lived at the Beacon before. It was a great place to live, more convenient than any other development I know of. Yeah the HOAs were high, but it has all the amenities that any of the other "full service" buildings have and the HOAs are the same at those buildings. There is a big advantage to having everything you need in one place. When I move back to SF I will certanly look at the Beacon again along with the other full service buildings in the area.
Posted by: return2sf at December 29, 2008 7:07 PM
I wasn't trying to be an elitist/arse. I genuinely do not understand the appeal of owning a brand new unit in that area. I lived in Mission Bay for two years, and aside from the convenience to work, did not find much going for it. Do you live there? What are the best parts about it?
Posted by: rr at December 29, 2008 7:24 PM
HOA: $787 a month
Taxes(at 600k): 7200 a year
bank interest? a sh!tload
you are throwing away $16,644+interest a year on a depreciating or stagnant asset.
Posted by: gjhgjhgjhg at December 29, 2008 7:53 PM
"How does this unit have views of "city lights" as the MLS record states. I always thought that a "city lights" meant that you saw the lights of buildings several blocks away. From this 2nd floor unit, you can see buildings across the street but no further."
i guess you can consider the car headlights (which are readily visible, per the photo) as 'city lights', or perhaps 'car lights' can be a new sub catagory in realtor-speak.
2nd floor on the beacon...damn, that's pretty frickin' low...might as well be in the basement and avoid all the street action.
also, i wonder if the developers went with el cheapo cabs/granite for the first few floors? those finishes scream cheap chinese developer from the sunset district. and those glossy white kit cabs make home depot's fare look intersting. now i know why it's $599k.
Posted by: 44yo hipster at December 29, 2008 10:02 PM
I looked into renting at "the Beacon" when it was called "Mission Place" a few years ago. The leasing agent mentioned that the white kitchens were on the first few floors, and if you rented above a certain floor (I want to say 10th), they had 'upgraded" to black appliances and (fake) cherry cabinets.
I ended up living across the street at Avalon for a year. Aside from the convenience of the Safeway, it was an awful experience. To get to work on Montgomery every day (took 25 minutes to go 1.5 miles), and the drunken baseball fans made it obnoxious on several nights a week.
Also, when will listing agents stop equating "luxury" with "new"?
Posted by: Mike S. at December 29, 2008 11:21 PM
$599,900 is pretty cheap, but that doesn't mean running out and buying it is the best decision you can make.
Posted by: Paul Hwang at December 29, 2008 11:26 PM
Wow. Tough crowd. I agree that "luxury condo" has become a meaningless term these days. Seems like everything is a luxury condo, regardless of location, finishes, or amenities.
But back to the Beacon, I agree it's not the nicest building in the city, but it's definitely livable and has a lot of good attributes. This came up on another thread, but this is a regular building for regular people. Nothing wrong with that. Not everybody can afford penthouses with 3 bridge views, marble bidets, and zebra divans.
Posted by: Dude at December 30, 2008 9:43 AM
I think it's interesting the way the title bar to this page reads "Flash
Back Forward to Beacon . . ." Funny!! I guess SS's habit of showing words in sentences in strike-through mode has met its limit . . .
Posted by: Juan at December 30, 2008 10:33 AM
Well this one has already gone contingent according to MLS. That just one day after the Tuesday tour. I guess someone thought it was a good deal.
BTW, I personally wouldn't buy here, but it would have been a nice place to rent back in my single days. The pool scene is supposed to be terrific....if you're into that kind of thing ;-)
Posted by: Lance at December 31, 2008 10:20 AM
Regarding the high HOA dues, keep in mind that some part of it is for earthquake insurance. (I'd like to know how much, though.)
Posted by: kriebly at December 31, 2008 2:01 PM
Earthquake insurance is an important thing to have in SF. I don't think there are other residential buildings in downtown, soma, mission bay or south beach that have it.
Posted by: steve at December 31, 2008 2:20 PM
So is earthquake insurance a seperate thing than standard homeowners insurance in SF? Would I need both insurances to get full coverage and wouldnt a bankd require having earthquake for a loan?
Posted by: bbbbbbbb at December 31, 2008 7:19 PM
Earthquake insurance is a separate policy. If you live in a condo, your HOA needs to get it to cover the building structure. You can take out an earthquake policy to insure the interest that you own in a condo.
Posted by: steve at December 31, 2008 7:46 PM
"If you live in a condo, your HOA needs to get it to cover the building structure. You can take out an earthquake policy to insure the interest that you own in a condo."
So is the "building structure" different than my personal interst in a condo(being that I supposedly own a portion of the structure)?
If I pay HOA that "includes insurance", shouldn't I be covered for earthquake damages?
I want to know the difference between building structure and my own piece of this. What about fire/water etc? How does the racket work?
thanks for the help BTW!
Posted by: bbbbbbbb at January 1, 2009 4:25 PM
Depending on what the CC&Rs say, a condo owner typically owns just the interior walls and the space within the unit; everything else is common property. This means all the owners have a common interest in the building structure, the parking garage, the courtyard, etc.
The monthly HOA fees that you pay would be used to pay for maintenance and repairs of the common property. The insurance purchased by the HOA would be used to insure the common property. You need to buy your own policy to cover the interest you personally own, e.g. interior walls, kitchen cabinets and whatever is in your unit.
If your HOA does have a earthquake policy, you should also take out a policy to cover a loss assessement because the deductible is usually quite high for an earthquake policy, and if a claim if made by your HOA on the policy, the owners will have to pay the deductible, and you can take out a policy for that. Talk to your insurance agent.
Posted by: steve at January 2, 2009 10:14 AM
You are correct this is Active Contigent! Let's keep on eye on it and see what the sold price is.
Posted by: Toni K at January 2, 2009 8:21 PM
Toni, I was only commenting on the HTML used in the title bar programming! (Not on the property itself)
Posted by: Juan at January 2, 2009 11:57 PM