SocketSite™

Yeah, their prices are really low.

I'm not sure I understand your article but they were nice for the money. I'm sure they'll move.

[Editor’s Note: It helps to understand supply if you’re looking to demand.]

So people left their contracts and they a bunch of supply available?

Step 1: Sold out/95% Contract
Step 2: Bleep hits the fan?

This is from the sales office or resales?

Why would they wait 4 yrs to move the remaining inventory? People were bidding left and right in 2005; this makes no sense.

maybe they have been kept by the developer as rental units, and he/she has now decided to sell them.

I have no inside information, but I do know the following. 199 New was built by Monahan Pacific (MP), the same builder of 246 First Street. MP also has a development of new, single family homes in Larkspur, right across from the Ferry Terminal (I don't recall the name). The principals of MP take a large part of their development fees as equity in the project or individual units that they develop. With little or no basis in dozens of condo units, MP has made a mighy fine living renting out these units over the past decade or so. My guess is that the Larkspur project is not performing (selling) and the proceeds from these units in 199 New will be used to help carry debt at Larkspur. Just a guess.

@ auden

I bet that is correct. The same developer (Monahan Pacific) developed 246 Second Street and he kept a number of units there as well. So many, in fact, that that building (246) has always had too many renters.

I looked at 199 a while back. There were some truly bizarre layouts (think kitchen alcove IN the living room).

I found that area a little too busy actually.

Very urban though, but not my taste.

I think it's a high quality project but the sales staff is very aggressive. Be careful.

There are six units on Redfin. 3 are listed with Pacific Union.

All 6 seem to have come on the market recently.

http://www.redfin.com/search#lat=37.786602&long=-122.399104&market=sanfrancisco&sf=1,2&status=1&v=4&zoomLevel=19

Regarding Drakes Cove, the MP development in Larkspur, I think Copernicus may be right. Looks like they sold two units last summer, but none since. They are really pricey ($2M) duplexes. At least one new unit is for rent asking $5,500. Odd location unless proximity to death row is a factor. If you are considering that location because it's only about a mile away from a really good high school (Gavin's alma mater Redwood), think again. This development is in the San Rafael school district.

for price comparisons, a 1-bedroom (on the 7th floor) was on the market during Fall of last year and did not sell until it went off the market, then back on and asking price reduced to 499,000.

And just to 'third' copermicus' comment, I believe the developer gains a tax advantage by keeping their profit in as rental units. Their cap gains is reduced, as they did not a cash profit, but their profit was (probably) free and clear units.

Any accountants reading this that can confirm this strategy?

I believe that most developers do not do this, as they see their strength in developing, cashing out, moving on to the next project. But perhaps MP Dev is a local firm and wanted to keep an equity ppsition in their portfolio. A smart move IMO, if they can pull it off.

Looks like the MP empire continues in it's need for ca$h. Don't know what's going on at 199 New Montgomery, but at 246 2nd Tom just sold unit #1006. His personal penthouse unit there just went on the market for $2.45M. Also, the Spa on the ground floor had a for sale sign go up last week. Drake's Cove must really be in a bad way.