425 1st Street #1802
Following in the footsteps of its “massive price reduction!!!” in December (originally asking $1,399,000, currently asking $999,900), the asking rent for 425 1st Street #1802 has been reduced to $4,200 per month as well (once asking $5,250).
Don’t forget to update those assumptions on your valuation/rent versus buy worksheets.
One Rincon Hill (425 First Street): Secondary Market Stumbles [SocketSite]
∙ Listing: 425 1st Street #1802 (2/2) – $999,900 [MLS]
$4200 / 2br – PRIME VIEW AT ONE RINCON HILL – RENT REDUCED [Craigslist]
Four Floors Lower, But Asking One Hundred And Fifty Thousand Less [SocketSite]

Recent Articles

Comments from “Plugged-In” Readers

  1. Posted by r u kidding?

    Prediction:
    It will rent for $3500 or sell for $850K.

  2. Posted by LMRiM

    Offer them $3K per month in cash if you want the views. Put any deposit in an escrow (using an out of work title guy – they’ll work for cheap) with strict disbursement conditions for the end of the leasehold (find an unemployed real estate lawyer – ditto).
    Be prepared for whatever may come, but in the meantime enjoy living there at way less than half the cost of buying!

  3. Posted by wow

    That rent is ridiculous! That isn’t even the good corner or layout.
    I pay $2850 plus the parking fee, have a better view, and slightly higher.
    The building does have some really douchey and odd people. To be fair, there are a few solid enjoyable dwellers….but hey, isn’t that what SF has become?!

  4. Posted by scurvy

    I’m with wow. $2800 would be the max I think it could rent for. I wouldn’t actually pay that, just saying that’s the max I’d think it could fetch.

  5. Posted by tipster

    But if they can’t rent for anywhere near their costs, what happens now when the seller can’t get their already reduced sales price?

  6. Posted by Antonio

    I would say this place could rent for maybe $3200 in this economy/environment. If you use average historical housing multiples (which are 15x-17x annual rent) you come up with fair value of between $575,000-$650,000. That is where this proeprty and other sf condos are headed, there is absolutely nothing special about this building or any of the other condos in SOMA for the most part, they are all cookie cutter apts. As far as the views in SOMA, do you really want to pay a premium for views of the Bay Bridge???? I don’t think so. We are still in the early stages of the destruction of the SF condo market.

  7. Posted by ex SF-er

    I don’t know that I’d say rental prices are stumbling. I doubt this would ever have fetched it’s original wishing rent.
    craigslist is notorious for people posting rediculous wishing rents.
    I will disagree with others though: I think the bay bridge view is pretty cool. I love looking out on the water and along the bridge and over to Oakland. it beats the southern views.
    I would have a hard time renting anything like this. how long can the owner rent this and cover the negative cash flow?
    it’s too high of a risk for this unit to be foreclosed upon or sold to somebody else and then you’re out on the street.
    I love renting, but I HATE moving. renting here would be temporary at best.

  8. Posted by condoshopper

    what happens if one rents such a condo and it ends up in foreclosure? will the bank kick you out? if not, when the unit gets sold to a new owner, can that owner then kick you out (assuming the new owner is moving in)? does it make a difference if you’re still in your 1-year lease, or if it’s after said lease and you’re month-to-month at the time?

  9. Posted by phatty

    Wow, you people are very out of touch with the rental market in this area. 2800? I don’t think so. They probably won’t get $4200 because they’re clearly desperate now from waiting so long at their ridiculous 5k+ price. So I’m guessing it will quickly get rented around 4k (that’s assuming it has parking – subtract 200 if not).
    I think ex SF-er has an excellent point though. The owner would be losing a lot per month, and one day they’ll wake up and realize the million dollar asset they’re losing money on each month is now only worth 750k, and Johnny Renter will be forced to move from the impending foreclosure.
    Oh… and Antonio, this is the stupidest comment I’ve ever read on this site: “do you really want to pay a premium for views of the Bay Bridge????”. Are you joking perhaps? If not – please go along the Embarcadero tonight around 7ish when the sun is down, and take a peak at how gorgeous that thing looks lit up. Now imagine seeing that from your living room, and having your living room dimly lit by it through your floor-to-ceiling windows, thus creating a constant romantic setting guaranteed to impress any guests.

  10. Posted by cooper

    That’s a 40% reduction eh…still quite a ways to go. the annoying thing is ORH and Infinity refused to negotiate back in August–at a time when they could have closed on these places at around or slightly above these prices. I tried to put some offers in at or above these prices –neither infinity or orh would bite. Lucky me tho–as the market has dropped a lot further than I thought. i.e. i was projecting maybe 40% declines–this looks like it’s going to 70% declines for some of these places..wow that’s gonna be rough..

  11. Posted by Dude

    ^^^ Depends on who holds the loan, I think. But if it’s Fannie or Freddie, they’ve got policies to keep tenants in place:
    http://www.mainstreet.com/article/home-auto/foreclosure/fannie-protect-renters-foreclosure

  12. Posted by Ryan

    It sounds selfish, but I am so happy I was able to get out of my deposit here. I would have been on my ass literally If I closed and lived there today. Wow. Smartest decision I have ever made in my LIFE!

  13. Posted by Antonio

    Phatty, no need to get personal here, my point is places with views like ORH should not sell at such a significant premium to places without views. A view of the bay Bridge should be worth no more than $50 per sq ft

  14. Posted by condoshopper

    i’m thinking from the perspective of a prospective condo buyer of a foreclosed unit, but which has a renter in it. the selling agents always say “the renter is very cooperative and will move out after you buy it, or shortly thereafter”, but i cannot take them for face value as they will be long gone after i sign. and every time these discussions come up on socketsite, i try to learn from the knowledgable posters here but there seems to be many different opinions, and hinging on every little factor like age of building, foreclosure yes/no, lease details, OMI yes/no, amount of eviction costs, etc. is there an official website that breaks down all this information?

  15. Posted by phatty

    Sorry, I should have worded that better and not made it personal (I’m sure Adam will yank it shortly). I apologize.
    I disagree with you completely though. I think a Bay Bridge view commands at least a 25% premium over a non-view unit (for a complete & lasting view – not a peak-a-boo). But I will give you that ORH doesn’t have the greatest view of the bridge because it’s on top of it looking down. Tower 2 in the Infinity will have a spectacular view of it though.

  16. Posted by Bob

    I agree with the last post. There’s a huge difference between seeing the bridge from the side than from the top. There are views and there are VIEWS. In my opinion, they have tried to put too much of a premium on this particular view.

  17. Posted by jamie

    I can vouch that the waterfront between the Ferry Building and the Bay Bridge is a total makeout fest for couples in the evenings … not to mention quite a few photographers capturing the image that few get to enjoy on a regular basis.

  18. Posted by tipster

    A foreclosure, a real genuine foreclosure, voids any lease and immediately turns it into a month to month lease.
    In SF, you have eviction control. An owner can only evict for a specified reason. One permissible reason for an eviction is for the owner to move in. That means that the new owner could do an owner move in eviction, after paying EACH of the residents about $4800. The tenant gets 60 days notice.
    The bank can’t do an owner move in (OMI), but the bank could do an ellis act eviction. In that case, they have to give you 4 months notice. If you hire an attorney, and you have any reasonable disability (glasses count), you can get that extended to a year. because of all of this, the bank really won’t do anything at all to evict you.
    The new owner might evict if the rent vs buy is not close. This means in SF, the new owner will likely want to evict. $4800 and 60 days after the sale, you’ll be out.
    There will also be showings. Private showings are allowed, open houses are not allowed, unless the tenant gives permission. There is no reason for anyone to give permission. My experience is private showings are not a problem. Keep your valuables out of sight and you’ll never know they were there. You don’t have to leave but they can do a showing between 9 and 5 weekdays without your permission, as long as they give 24 hours notice. The notice can be verbal.

  19. Posted by waiting2nest

    “the new owner could do an owner move in eviction, after paying EACH of the residents about $4800. The tenant gets 60 days notice.”
    How long has that rule(law?) been around? I rented a condo in Pac Heights with 2 other roommates when I first moved to the city in 1995. A year and a half later, the owner sold the condo (and the realtor, who was the owner’s sister, held open houses without asking us BTW), and we got an owner move-in eviction from the new owner – – without any monetary compensation, and with 30 days notice. We were on a month-to-month lease at the time.

  20. Posted by unearthly
  21. Posted by San FronziScheme

    Ryan,
    Smartest decision in your life, yes most probably, and hopefuly you’ll make an even better decision: buy when prices have gone down some more (much more imho).
    The circle is not virtuous but vicious for condo prices. Low selling prices mean cheaper rents (combination of lower basis cost for landlord + rental oversupply from stuck flippers). Cheaper rents make the Own vs. rent rationale even less attractive for buying. Prospective landlords will also steer away from these investments as rents go down.
    Less reasons for buying makes demand lower and prices have to mechanically go down more than they already have.
    When will this downward spiral stop?
    IMHO, that will happen when small time landlords like me who are deeply obsessed with keeping their shirts (also known as good rental ROI and positive cash flow) will look at their amateur Excel sheets and realize that the numbers can work. Never ever throw good money every month into a lousy investment.

  22. Posted by spencer

    you can rent a 2bd 1ba in prime pac hts for $3K per month.
    Who in their right mind would pay more to rent in a skyscraper on a freeway with no walking neighborhood to speak of?

  23. Posted by LMRiM

    I miss Recent ORH buyer’s posts.

  24. Posted by JohnK

    Location, Location, Location.

  25. Posted by The Milkshake of Despair

    “I miss Recent ORH buyer’s posts.”
    Me too but now that the 1RH sales office has downsized they’ve probably dropped “guerrilla blog marketing” from their activities.
    (ahem … 2nd attempt to flush our good old friend(s) out)

  26. Posted by sanfrantim

    very funny, milkshake. But, seriously, should we be concerned that cratering condo prices – sale and rental – would discourage the building of new units, thereby contributing to SF’s long-term housing imbalance?

  27. Posted by Louis

    Views have “always” gotten a big premium in SF — say at least 25% — in every area facing east and north. spread has to be between the right values, i know, but it is at least 25% , depending.
    It look like Infinity is pulling ahead of ORH in terms of actually closed sales / units moved in and occupied / sales office momemtum continuing.
    You agree??

  28. Posted by condoshopper

    tipster, thanks for the info.

  29. Posted by Trip

    The front steps has links to some interesting data from the last two years of SF real estate — below. They show pretty bluntly what is going on — far higher numbers of listings, far fewer sales, and significantly lower median prices. And these trends have greatly accelerated in recent months. We can talk about when it will end and how far it will go but not what is happening. I’m with tipster (on another thread) — why in the world would anyone buy right now when the direction of things is so clear?
    http://www.sfrealtors.com/pdf/realtor_advantage/Median_Prince_Condo_and_Single_Family_Dec_2008.pdf
    http://www.sfrealtors.com/pdf/realtor_advantage/Supply_Demand_Condo_Single_Family_Dec_2008.pdf
    http://www.sfrealtors.com/pdf/realtor_advantage/Sales_Rate_Condo_and_Single_Family_Dec_2008.pdf
    http://www.sfrealtors.com/pdf/realtor_advantage/Supply_Demand_Condo_Dec_2008.pdf
    http://www.sfrealtors.com/pdf/realtor_advantage/Supply_Demand_Single_Family_Dec_2008.pdf
    http://www.sfrealtors.com/pdf/realtor_advantage/Median_Price_Condo_Dec_2008.pdf
    http://www.sfrealtors.com/pdf/realtor_advantage/Median_Price_Single_Family_Dec_2008.pdf
    http://www.sfrealtors.com/pdf/realtor_advantage/Sales_Rate_Condo_Dec_2008.pdf
    http://www.sfrealtors.com/pdf/realtor_advantage/Sales_Rate_Single_Family_Dec_2008.pdf

  30. Posted by gowiththeflow

    Louis – I agree.
    Also regarding views: I closed and did a refi within the past 6 months at the Infinity. Each of the appraisals they valued/used as comps in or around the Infinity area were given a value of 50k or 100k depending on what the view actually was, direction etc. The comps were all floors 12 and below so I imagine the higher the floor, the better the view, the higher the premium.

  31. Posted by Willow

    Condoshopper – The short answer to the situation you describe is to include a contingency that the unit will be delivered vacant. Do not take the agents or tenants representation that they will co-operate. I’ve been in that situation and was burned badly and susequently lost a significant amount of money.

  32. Posted by Eric in SF

    I’m pretty sure anything built after 1979 doesn’t have rent or eviction control. OMI restrictions appear to apply and there are specific differences on how far out the notice has to be when the OMI is on a SFH or Condo that just changed hands.
    http://www.sftu.org/eviction.html
    (I link to a rather biased source because it’s the only one that even attempts to summarize the law in a readable fashion. Make sure your salt shaker is next to you while reading.)

  33. Posted by Rillion

    Eric, this was discussed in another thread, rent control and eviction control are two different things and lack of rent control does not mean lack of eviction control. So units built after 1979 while exempt from rent control are not exempt from eviction control.
    The Ass(essor) was all over the news the other day trying to remind tenants that they can not be evicted without a valid reason and foreclosure isn’t a valid reason.

  34. Posted by rr

    Having dealt with buying a TIC in the process of conversion to fractionalized loans while simultaneously having to deal with not one, but two tenant occupied units, my advice to anyone considering buying a condo currently rented is DON’T, unless you expect to continue renting it, or you are willing to find a competent (and, thus expensive) attorney.
    This being a buyer’s market, there is no reason to put up with trying to get tenants out. Eliminate the unit from your list and keep going. There are far too many legal ways for tenants to obstruct you, and too many minor mistakes you can make that result in you getting sued. (And note that your home owners insurance doesn’t cover you until after you’ve closed escrow. If something you said triggers a lawsuit, such as a non-legal implied threat of eviction, and it occurred before closing, you will have no one indemnifying you)

  35. Posted by Ed

    I rent at ORH. The place is awesome. I live on a very-very low floor; the only time noise is ever disruptive is during construction on the Bay Bridge.
    Although I think their rent is high, there are plenty of reasons people live in ORH/South Beach rather than “The Real SF”. One of the best reasons, IMO, is the lack of tourists (it’s annoying visiting my buddy’s home in North Beach). Additionally getting in and out of the northern parts of SF is crazy. If you work in South Bay (as I sometimes do), East Bay or in The Financial, this is an ideal location.

  36. Posted by chuckie

    Ed, what do you think about the new “asking rent” on this place?

  37. Posted by unearthly

    IMO the asking rent is high; I live on the 20-something floor of the Infinity and the rent was $4k/month before the economic implosion. The listed unit can be had for $500 less per month. 6-months for now it will be even less as speculators run for the hills.

  38. Posted by Paul Hwang

    Scurvy,
    I’ve rented out 3 units (one and two bedroom) at One Rincon Hill in the last 3 weeks, and they have all been rented out higher than $2800 / month. It is true that rents are lower than 9 months ago, but not to that extreme.
    2008 was a tough year for real estate in SoMa / South Beach. On the positive side, it did provide an excellent opportunity for buyers to get into the luxury condominium market in San Francisco at aggressive price points. Many experts have predicted a flat to slightly downward trend for prices in 2009. Although this may be unpleasant for us as home owners to hear, we must face this potential reality.
    It remains to be seen what 2009 holds, however one thing is certain; San Francisco will always be San Francisco, and there will always be people who want to live here. Look at today’s beautiful weather!

  39. Posted by spencer

    Paul,
    Are your experts the NAR economists? I have not heard about a flat to slightly down 2009. I have heard about a moderately down to doomsday scenario for 2009.
    In San Francisco, the futures exchange is predicting an 18% drop in RE for 09.

  40. Posted by chuckie

    Paul wrote, “Many experts have predicted a flat to slightly downward trend for prices in 2009.”
    Really? And as the expert realtor specializing in this area, what’s your prediction? Now, don’t tell me your comment above was just a teaser and I have to make an appointment to get an answer.
    :)

  41. Posted by Dude

    Ha ha…outstanding word choice by Paul. I’m looking forward to the price points becoming even more “aggressive” throughout the year.

  42. Posted by badlydrawnbear

    Since Spencer alluded to it, and Henry Shiller was just on CNBC answering the question “When will housing hit a bottom?” with “The CME futures market is predicting a bottom in 2010.” I give you THIS chart of the CME CSI Futures for the SF MSA through May of 2009, with the CSI at 121.4 for SF (you have to go back to late, October?, 1999 for the CSI to be that low).

  43. Posted by chuckie

    “outstanding word choice by Paul”
    Lots of words… nothing useful. His ads give me the used car salesman heebie jeebies.

  44. Posted by orhboy

    phatty, the lower units at ORH has really beautiful of the bridge, since you don’t have to look down, when you get in the unit, the whole bridge is right there inside the window, that’s something I never expected to buy a cheaper unit.

  45. Posted by jj

    Not sure about renting 3 units in 3 wks. Almost all available units have been on the market for months, some 2brs for less than $4k, and some were finally taken off the list.
    As for CSI for SF, it’s not an accurate gauge for the city because it includes San Mateo, Marin, Contra Costa and Alameda. But, if you ask me, it’s not going to be flat for 2009. Awful lot of units in SF have turned into rentals hoping for a better time, and some of them won’t be able to hold out too long.

  46. Posted by SF Loser

    The lower units at ORH are awesome since it is practically like you’re living ON the bridge. It’s almost like it runs right through your kitchen.
    Who wouldn’t pay up for that?

  47. Posted by Dude

    I posted a comment that got eaten by the filter because of links, but there are several 1-bedrooms available at ORH below $2,800. Just check CL.

  48. Posted by orhboy

    I live on 01 stack, it does make me feel the bridge run through my neighbor’s unit on 02 stack, however I’m not sure how people in 02 stack feel…
    Could not speak for others, however at least I know I don’t feel I live ON the bridge

  49. Posted by orhboy

    I live on 01 stack, it does make me feel the bridge run through my neighbor’s unit on 02 stack, however I’m not sure how people in 02 stack feel…
    Could not speak for others, however at least I know I don’t feel I live ON the bridge

  50. Posted by diemos

    “the asking rent for 425 1st Street #1802 has been reduced to $4,200 per month as well (once asking $5,250).”
    It looks like someone is learning that Mr. Market doesn’t care what you need to cover your mortgage.

  51. Posted by PresidioHtsRenter

    condoshopper wrote:
    > i’m thinking from the perspective of a prospective
    > condo buyer of a foreclosed unit, but which has a
    > renter in it. the selling agents always say “the renter
    > is very cooperative and will move out after you buy
    > it, or shortly thereafter”
    Anyone that buys a condo (at anything close to market price) that they plan to occupy with a tenant still in it is a fool. If the condo is in San Francisco they are unbelievably foolish. It is easy to stay rent free for months after a sale if the tenant wants to rip you off. They can also thrash the place and move out in the middle of the night with the appliances and window coverings…

  52. Posted by embarcadero

    This is the story of a long anticipated collapse in the SOMA condo market, that may well extend citywide. Anyone who buys in this market either has money to burn or is easily bamboozled. There is no reason to do anything but rent (barring very unusual circumstances).
    The “value” that agents like Paul add is to their bank accounts, and by virtue of his near constant trolling in here, I’m guessing that his ability to add value to his own finances is becoming increasingly limited.
    Increased realtor trolling is just a sign of the collapse. Maybe we could come up with an index?

  53. Posted by diemos

    “2008 was a tough year for real estate in SoMa / South Beach.”
    2008 was just a mild annoyance compared to what’s coming.

  54. Posted by West Portal

    badlydrawnbear,
    I’d be interested to see the CME CSI chart you describe, but the link appears to be for White Plains NY through 2008Q1. I am curious just how “agressive” price points will be based on the CME futures.

  55. Posted by Paul Hwang

    Embarcadero, chuckie, etc.
    Being an expert means:
    1) Having the inate ability to predict future events, weeks, months and years ahead of the event actually happenning.
    2) And then afterwards, being able to explain to people why those events failed to happen as you had predicted.
    Paul
    PS This is a joke and I do not make predictions.

  56. Posted by anon

    I’m currently renting in one of the big SoMa luxary buildings and discovered that my landlord is very behind on his HOA and mortgage payments, and it looks like the property is going to enter foreclosure.
    It’s a shame as it’s a wonderful property, but I do pay way less rent then I now it would cost to pay an interest-only mortgage on.
    In relation to the property discussed in this post, yeah I would be concerned about offering too low a figure and it getting accepted and then the property getting foreclosed. A good deal is only good if it’s good for the landlord too. if he’s not getting a return then he’s not going to stick arround.

  57. Posted by orhboy

    I live on 01 stack, it does make me feel the bridge run through my neighbor’s unit on 02 stack, however I’m not sure how people in 02 stack feel…
    Could not speak for others, however at least I know I don’t feel I live ON the bridge

  58. Posted by chuckie

    Paul wrote, “I do not make predictions”.
    But on public forums where you shamelessly troll for customers, you do make statements like “Many experts have predicted a flat to slightly downward trend for prices in 2009.”
    If you’re willing to say this openly on a forum, I shudder to think what you tell them after you have had a chance to evaluate the level of their sophistication in the privacy of your office. I bet you give them just enough rope.
    There may be a joke in there somewhere, but frankly, I don’t get it.

  59. Posted by badlydrawnbear

    @West Portal, sorry if the link is busted you can go and get the CSI Info, including price tiers and CME Future info anytime at
    http://www.papereconomy.com/CSI.aspx

  60. Posted by sfrob

    just curious what all the doom & gloomers here think will happen to the stock market in ’09? If the SF RE market is going down another 20%-40% where will the stock market be at year’s end?

  61. Posted by LMRiM

    2008 was just a mild annoyance compared to what’s coming.
    Gold star for you, diemos :)
    Looks like we are settling into a full on global trade/demand collapse:
    http://www.telegraph.co.uk/finance/4229198/Shipping-rates-hit-zero-as-trade-sinks.html
    I think I wrote last year that the belief in government/Fed to make it all better will be the last bubble to burst. I hope it’s this year.

  62. Posted by Paul Hwang

    Sorry to disappoint you Chuckie, I do not have the ability to predict the future. You’re right about my jokes though, they are kind of lame, I won’t quit my day job.
    About this “trolling” stuff, are you a communist? I’m excellent at evaluating / creating below market deals for buyers and above market deals for sellers. I ask for business, that’s the way we do it in the United States.
    Paul

  63. Posted by cooper

    On these #s–I wonder how this is going to impact comps at Infinity when they launch. I know they wanted to charge a lot more for building two then the first, but that’s gonna be a little tough now eh?
    On Paul-posting here is going to be brave thing. almost no matter what you say there is going to be a lot of anti realtor angst because realtors were part of the equation that walked RE prices up for some long.

  64. Posted by gowiththeflow

    Interestingly niether appraisal I had done (two different sources, many months span) used any ORH unit as a comp. So for comp purposes I doubt there will be an impact. Good thing.

  65. Posted by lookylook

    hahhah this is so funny: paul accusing someone of being a “communist” is soooooo 80s … you should accuse him of being a “terrorist”

  66. Posted by phatty

    Wow – you had two appraisals done at the Infinity, and neither looked at ORH as a comp? That doesn’t seem right at all… did you happen to question them about it? I’d be interested to know their logic – seems to me these two buildings are very much comp’s of each other.
    Speaking of the Infinity, shouldn’t tower 2 be opening sales this month? Anyone predicting more of a delay? My guess is they start selling in March/April, and when they do, they completely change their marketing strategy; they come out of the box with their hat in their hands waving a white flag and admit the market sucks, but advertise that as an incentive to pick-up amazing deals. And they price 10-15% less than Tower 1 (and accept 10-15% below that).
    And if/when that happens, resellers like this guy at ORH will be super-screwed. We’ll be seeing him walk away around June/July.
    But that’s just me playing Nostradamus this morning. Anyone else want to get their Nostradamus boots on?

  67. Posted by condoshopper

    thanks everyone who provided information about potential pitfalls of buying a unit with tenant; it really helped in evaluating how much i should pay for such a unit.

  68. Posted by r u kidding?

    When did appraisers become a trustworthy source of asset valuation?
    A house/condo/TIC is worth what someone else is willing to pay for it. When everyone comes around to agree on this point, the market will pick back up and transactions will take place at the FMV of housing.

  69. Posted by fluj

    “When did appraisers become a trustworthy source of asset valuation?”
    I don’t know exactly. I’d guess 16th century? George Washington was an appraiser in the 18th century.

  70. Posted by gowiththeflow

    “When did appraisers become a trustworthy source of asset valuation?”
    Answer: They never did.
    I was just responding to Coopers post more as an fyi. “On these #s–I wonder how this is going to impact comps at Infinity when they launch.”
    Clearly a prop is only worth what one can sell it for.
    I did my homework so I could have cared less if ORH was used as a comp for my place. It would not have made sense anyhow as I am in a treetop (disc in past threads).
    Email was sent this week regarding invite/RSVP to the launch event for Tower 2 sales so it looks like we are moving forward here. If you walk by tower 2 it is clear they are just about wrapped up with construction and everything looks great!

  71. Posted by ex SF-er

    Wow – you had two appraisals done at the Infinity, and neither looked at ORH as a comp? That doesn’t seem right at all…
    perhaps there are enough recent transactions at Infinity itself that no ORH transactions are needed.
    There may also be other buildings nearby with more recent sales than ORH, making them better comps.
    I’m not saying that ORH and Infinity aren’t comps for one another (they are), only that one needn’t necessarily use one building’s comps for the other building if other comps are available.

  72. Posted by gowiththeflow

    Phatty if Nostradamus is correct it won’t matter; we will all be gone by 2012 or so right?

  73. Posted by gowiththeflow

    Comps used were: Infinity tower unit, Brannan, Brannan, 1 South park, Infinity other podium, Brannan, and 88 King. Of them all I must say 88 King prices shocked me, alhtouhg they priced out the lowest of all comps, the going prices were much much higher than I would have guessed.
    I thought these were fair comps but still did my own legwork.

  74. Posted by tipster

    The market is deteriorating and that is going to continue. If that’s what Infinity believes, then they will not want a delay, but will want to get the sales office open ASAP. If prices will drop throughout the year, the sooner they open, the more money they make.
    And that’s exactly what they are doing.
    Tower 2 could stop sales of tower 1, but that then becomes a pricing issue. With the sales office open, they can play games like pricing tower 2 higher than tower 1, not because they think they will sell any tower 2 units at those prices, but because it will make people think that tower 1 is more valuable and will help sell the remaining inventory in tower 1. Once tower 1 is mostly sold, they will then move to lower the prices of tower 2 to get those units sold.
    So when you see tower 2 priced higher, you need only wait.

  75. Posted by fluj

    We expect nothing but the purest of pure conjecture from Tipster, and he delivers every time.

  76. Posted by Dude

    So fluj, do you think tipster is wrong? Will Infinity tower 2, in your expert opinion, sell for more than tower 1?

  77. Posted by gowiththeflow

    Any thoughts on: If the prediction for hitting bottom is say end 2009 or early 2010; any chance the Infin would hold firm or somewhat firm on tower 2 pricing knowing things will start going back up after that? Would the carrying cost Be more or less than the reductions you all say may happen if they do?

  78. Posted by phatty

    “If prices will drop throughout the year, the sooner they open, the more money they make.”
    Tipster, that strategy makes sense to me but it doesn’t appear to me that this is the route Infinity is going. There’s nothing that’s stopping them from opening Tower 2 sales today, or even 6 months ago. They have been waiting to avoid competition between the 2 towers. A mistake in my opinion. Now sales are so slow, I don’t see any reason for them to start Tower 2 until the seasonal sales trend picks up when winter ends. When they do start selling, their only chance of survival is to open up with a bang. Starting sells now at the low point of the season would lead to more days on market when the height comes – and thus less demand then and even lower prices.
    Of course, this is just a pure guess on my part. I could be proven very wrong very soon. :)

  79. Posted by fluj

    I disagree with projecting others sales tactics, “playing games,” sure. No, tower 2 will sell for less IMO. I’ve been saying that.

  80. Posted by gowiththeflow

    FYI in past people were discussing construction prices for the Infin complex; you can find the numbers in the Business Times book of lists for both phases. Does anyone what numbers are on the books for Tishmans loans? If they have made enough to cover the loans do you think they would sell tower 2 for less or hold tight?
    I may be proven wrong but I think they will hold pricing fairly firm for the top notch units, perhaps drop pricing on the ones they knew they would make less profit on from the get go.

  81. Posted by tipster

    “We expect nothing but the purest of pure conjecture from Tipster, and he delivers every time.”
    And I said SF prices would drop and they did. And I said the first resale of ORH would be too tempting for the sales office not to interfere with, and that deal looked pretty shady to me, and still does.
    So, I guess you’re right: I DO deliver every time!

  82. Posted by chuckie

    Paul wrote, “About this “trolling” stuff, are you a communist?”
    Let me see if I can bring it back on-topic. While commenting on ORH/Soma/South Beach, you wrote, “Many experts have predicted a flat to slightly downward trend for prices in 2009.”
    I already know you don’t make predictions. How about providing your sources? Do you agree or disagree with these experts? Or do you just quote these experts when “asking for business”?

  83. Posted by ex SF-er

    And that’s exactly what they are doing
    I disagree. I’ve said this before: they bungled this to the extremes. If they were reading the market well they would have opened up sales in Tower II as soon as possible, realizing that some Tower I units would go unsold, but selling Tower II for top dollar. Or they would have held on building Tower II.
    Instead, now they have to hope that people show up AND BUY a Tower II unit, and aren’t scared off by the current economic cycle. some Tower I units will still likely sit unsold *(unless discounted significantly).
    I’m sure there will be several buyers for Infinity II. But I can’t imagine that people will knock the doors down like they did for Tower I, not with this economy.
    even vaunted Google is laying off right now. (sure, it’s been mostly “contractors” but a contractor losing their job is still one less person employed… and it’s been up to 10,000 contractors… also laying off 100 recruiters and closing 3 offices doesn’t speak to income and job security for the googleaires either). oh wait, Google can’t possibly lay off people because they are innovative. And I’ve been told time and time again that nothing bad can happen to anything that is innovative.
    maybe Infinity has FINALLY seen the light and understands what they’re up against. we’ll see.
    my prediction: there will be argument about whether or not Tower II’s sales are stronger than Tower I. The reason: a few choice units will sell, and those will be better than Tower I simply because Tower II is more desireable, so will sell for more $$$. But there will also likely be less numbers of sales.
    so it’ll take a while. luckily, we can analyze each transaction (through the opacity of the marketplace) and argue! it’ll give us something to do for the next year

  84. Posted by MBPioneer

    ORH will not be a comp for Infinity as long as one building sits one tree-lined block from the loveliest part of the Embarcadero and one sits astride a freeway surrounded by vacant lots, barbed wired fences and a gas station.
    Yes, they are both new towers. As long as you can’t walk outside without holding your ears (and nose if one of the locals is urinating on the sidewalk), ORH will remain a third-rate location at best. Argue all you want about the two buildings… one thing we can all agree on: if the market were not on fire in 2006/2007, 1st and Harrison would be a homeless tent city in a hole in the ground.
    Anybody on this site ever take a walk under the off ramp on Harrison Street on one of these beautiful evenings?
    How about you, Paul? Or do you roll up your windows and hope for a green light like the rest of us?

  85. Posted by viewlover

    I think the units with water views on tower 2 will be gone very quickly and probably close to asking, whatever that happens to be.
    They are unique in that I believe the views will not be obstructed later on, and right on the embarcadero. Location, location, location.

  86. Posted by fluj

    And I said SF prices would drop and they did
    So did I: “I think a price shift should happen, it’s illogical that it hasn’t yet, but it really hasn’t” ring a bell? So did everybody. You also pointed to countless examples as evidence of dropping prices even though those properties, or others in the same area, closed for more than previously. You also made countless incorrect sales price predictions. You also posited concerted data manipulation schemes more times than I can remember.

  87. Posted by anonfedup

    “Or do you roll up your windows and hope for a green light like the rest of us?”
    AND hit the recirculating air button!

  88. Posted by Paul Hwang

    Here are some interesting facts on Infinity from a recent meeting I attended with the developers of Infinity (today at noon):
    1) 287 units closed
    2) 330 units in contract or closed.
    3) Nancy Oaks has applied for her liquor license.
    4) Tower 2 will be sold in phases to begin with.
    I hope that this is useful information for you.
    Paul

  89. Posted by phatty

    287 out of 365 = 78.6%. I forget what the # use to be… but I feel like it’s gone down??? Is it possible to unclose a unit? :)
    And I have no faith in the 43 units that are ‘in contract’… too high a #. No reason they haven’t closed by now.
    Can’t wait for Nancy’s restaurant to go in. Do we know the name of it?
    Oh, and Phase II of the Infinity will be sold in phases? Lol. Will those phases of phases have different segments we can purchase? And I’d love it if my segment has it’s own individual lots I could branch off. That would be super. I love playing around with words to mask reality!

  90. Posted by Dude

    Let’s see if Paul is willing to give us a straight answer the way fluj did (BTW, thanks, fluj).
    Paul: Will Infinity tower 2, in your expert opinion, sell for more than tower 1?

  91. Posted by gowiththeflow

    Phase 1 of the project was also phased in to keep everything organized, closing of escrow’s, move in’s hassle free etc. and it worked.
    Phatty – get your facts straight before you post.
    “Oct 17, 2008 … Tishman Speyer Managing Director Carl Shannon said Phase I of the 365-unit Infinity is 70 percent closed, with 251 units sold and 40 condos …”
    Not bad if my numbers are correct:
    287 currently closed
    43 in contract
    35 units left
    October:
    251 currently closed
    40 in contract
    74 units left
    So 39 units have sold since October = est. 13 per month in this economy? Pretty good.. can someone check my numbers please.

  92. Posted by gowiththeflow

    Phatty units in contract must be new contracts?

  93. Posted by phatty

    gowiththeflow,
    First off, this:
    “I forget what the # use to be… but I feel like it’s gone down??? Is it possible to unclose a unit? :)”
    was a joke. And even if you take it literally, I clearly pointed out that I don’t know the exact #. Even so, they’ve been touting a 75-85% (ballpark) figure for years now. And no one has really defined it, at least to my ears. Still, they have definitely been selling more – the building appears less much less vacant than it did 6 months ago. But I’ll say it again – I have no faith in their ‘in-contract’ figures. In fact, I’d even be suspicious about the recent number of closed units. What’s to stop Tishman from selling to a subsidiary company, and renting those units out? All the units for rent don’t make sense – what kind of investor would buy in a crashing market for an investment? Not many I’d think.
    And… uh… one of us needs to get our facts straight. Phase 1 did not SELL their units in phases. When the sales office opened, all units were available. They phased the closings (move-ins).

  94. Posted by Paul Hwang

    Oh, and to squash another rumor per my noon meeting (so we do not have to talk about it anymore):
    1) Tower 2 will NOT be rentals.

  95. Posted by diemos

    “1) Tower 2 will NOT be rentals.”
    Ok. And ORH tower 2 is going to break ground in january … er, february … er, march … er, as soon as we find a contractor … er, someday maybe.

  96. Posted by gowiththeflow

    Relax..
    I had no idea you were joking, re-read it, still missing the joke in it all. You stated the #’s as if you knew them vs. your lates post noting “they’ve been touting” although I am not sure who they are? You should have just stated it that way to begin with. Regardless I was just providing a quote directly from the developer re: the numbers for your reference. Just trying to help.
    I can’t say we are not all being lied to, for all I know Tishman is running a big scheme but I really doubt it.
    Units are closing on my floor, actually think the floor is sold out now; final closings all happening the past month or so unless they staged people to buy and changed the door stickers to trick me.
    Selling to a subsidiary and renting, that one I believe could happen – happened in another building I was in. That would be interesting from an HOA %owned voting standpoint should the developer keep over 50% of the units; hope this is not the case. Would the developer not have to report this to current residents? Back to the appraisal (not that I believe it) but my refi appraisal done in the past month or so, it notes ” Does any single entity (the same individual, investor group, corp, etc.) own more than 10% of the total units in the property and it states no. Per tax records except for the unsold units still owned by the developer, most units are owned by different owners”. So in theory what you say could be true I suppose.
    I agree not many investors would buy as an investment right now but we have no idea what they are selling the last phase 1 units for so it is possible.
    Your last point – ok you win.

  97. Posted by Mole Man

    Over the weekend I looked at some units here. Only a few lower units actually look out at the bay bridge. From many lower units the bulk of the building blocks the view and noise from the bridge. Some of the townhouse units are open for viewing now including one that looks out onto the entrance and has minimal exposure to the bay bridge, Harrisonm, and the freeway ramp.
    Rincon Hill is a little bit steep and quiet as San Francisco neighborhoods go, but some people find those characteristics a good match for their lifestyles. This talk of bums has me confused. I’ve never seen bums hanging around Rincon Hill, nor have I ever smelled pee while walking there. You have to go a few blocks away to find that kind of San Francisco action. That is typical of Rincon Hill in general: It is very close to everything, yet still at arms length.
    During this heat wave residents have been lounging by the pool. The outdoor space surrounding the pool is extremely comfortable and inviting. The talk of cold and fog and wind may apply to periods of stormy weather, but most of the time the peak of Rincon Hill is quite deliciously balmy and view-tiful.
    This talk of a South of Market condo collapse is pretty silly. This was a bubble. Prices were too high–way too high. What is happening now is a correction. Landlord opinions can be interesting in this, but the decision to buy a unit to live in is typically quite different from the kind of calculations that landlords make. Much lower prices may hurt a few in the short term, but overall the correction is going to be a good thing for the market as increasing agreement with respect to values makes property exchange easier.

  98. Posted by viewlover

    selling in phases is not new and Infinity probably learned by their mistake not to do so for tower 1. Typically lower floors are sold first, once the majority are gone, the upper floors are released with increases in price since the availability becomes less. Less supply usually equals higher price. The real question is the demand.

  99. Posted by Dannyboy

    Rincon Hill is good for one thing:
    Getting gas on the freeway onramp.
    Get a grip, city folk! It’s a sh*thole!

  100. Posted by JohnK

    I hate to clutter this forum with additional facts, but Infinity Phase I was sold in phases as well.

  101. Posted by condoshopper

    if you were a willing and able buyer, insisting that you want to buy a certain unit which is not part of the current “phase”, will they really turn you away in this market?

  102. Posted by viewlover

    in phases meaning that the lower floors were sold first and then the upper floor were released at a later time? I really thought the whole thing was for sale even before tower 1 was complete. Also, how come there are so many units available if they were sold in phases? And I have not been nor do I know, but just from the postings here I get the impression that there are alot of lower floors available which goes against the idea of selling in phases. I realize that they were closings in phases but contracts?

  103. Posted by phatty

    “I really thought the whole thing was for sale even before tower 1 was complete.”
    It was – not sure why JohnK thinks it wasn’t. I’ve been in the sales office – I know for a fact it was. Perhaps he’s referring to the fact that they held some units out of their ‘official’ inventory to inflate the % sold figures. While I was there the unit I was interested in wasn’t part of this ‘official inventory’, but they had no problem showing it to me and offering it up.
    This isn’t selling in phases.

  104. Posted by SocketSite

    The reduced listing for 425 1st Street #1802 has been withdrawn from the MLS without a sale.

Add a Comment

Your email address will not be published. Required fields are marked *