March 30, 2010

One Hawthorne: The SocketSite Straight Scoop (And Sales Update)

One Hawthorne Aerial (www.SocketSite.com)

While One Hawthorne's website has been live since last October (to which floor plans for the first seven floors have since been added), and the onsite sales office has been "open" for a few months, pricing has yet to be finalized and tours still aren’t being offered.

The disconnect between an "open" sales office and lack of information has led to a slew of One Hawthorne related readers' tips like the following:

I've toured the One Hawthorne sales office 3 times over the past 2 months now and I find it a bit unsettling that the building still does not have pricing or models and DOES NOT anticipate pricing and tours until "late Spring" without further specifics….I'm a highly interested and qualified buyer looking to downsize from my home in Marin but I feel like this developer must not have their act together if the sales office have been open for almost 3 months (the office opened on January 4th) with no idea of pricing or when people will begin to write contracts.

So here’s the inside scoop...select brokers will be getting their first tours of the building on April 19 at which time pricing will be released. Brokers will also tour on the 20th and the sales office will start writting contracts on April 21.

Once again, One Hawthorne consists of 165 units (26 junior one's, 74 one-bedrooms, 59 two-bedrooms, and 6 three-bedroom penthouses) with 124 non-deeded parking spaces which will be valet and are expected to run around $300 per month.

With a $120 million construction loan, whether or not the developer of One Hawthorne will end up underwater on the development, and what role that’s played in any delay to date, is open for debate.

We'll wait for actual pricing and early sales figures before we join the fray.

One Hawthorne: A Couple Of Renderings To Accompany Our Reality [SocketSite]
One Hawthorne: Close To Being Closed In But Without Its Crown? [SocketSite]

First Published: March 30, 2010 2:45 PM

Comments from "Plugged In" Readers

The location is great. The building looks good. The $300/month valet parking plus $500 HOA fees is a definite deal-breaker.

Posted by: SFRE at March 30, 2010 2:50 PM

Great location - right next to the Gold Club!

Posted by: location at March 30, 2010 2:58 PM

@location

Hey buddy, the Gold Club is a classy joint!

Posted by: Rincon Hill Billy at March 30, 2010 3:02 PM

@plugged in tipster

this place is so wannabe rincon hill...just go live at the real thing

Posted by: Rincon Hill Billy at March 30, 2010 3:05 PM

lol@the "jr 1 br" nonsense. when did studios become "junior" 1 bedrooms? i love when they throw a 2' by 10' piece of wood on the floor as describe it as a room "separator" instead of what it really is - a tripping hazard.

Posted by: lolcat_94123 at March 30, 2010 3:07 PM

Dude, what are you talking about? Who cares about the Gold Club being there, its city living. Its not like its 6th, or the Dogpatch or the Mission or the Western Addition. The location is convenient, there is a lot to do in that area, many people work downtown, and its relatively safe.

Posted by: SFRE at March 30, 2010 3:07 PM

Much better location that Rincon Hill. You don't have to deal with 1st street, and you can walk to almost anywhere you have to go.

Posted by: SFRE at March 30, 2010 3:09 PM

for a valet building, would the parking staff's salary/expense come from the $300 monthly parking fees, or from the general HOA?

Posted by: condoshopper at March 30, 2010 3:14 PM

The "bank" that supplied the construction financing is actually a conglomoration of construction union pension funds. This is a big loan for 165 units. Just to pay this off they have to sell the units for an average of $727,000 per w/o deeded parking. Hard costs for construction on this building should only be $60M - $65M - about half the loan.

I just never understand developer math.

Posted by: OneEyedMan at March 30, 2010 3:38 PM

6 penthouses@ $2M = $12m
59 2bd @ $750K =....$44.25M
74 1bd @ $600K =....$44.4M
26 Jr1s@ $450K =....$11.7M

Total Sales........$112M

Less $7M in commissions, transfer taxes. $105M

$120M Construction loan?

I'm sure they can cut a few corners on finishing and make this work out OK.

Posted by: tipster at March 30, 2010 3:47 PM

$450k studio w/o parking? That will be a hoot.

Posted by: J at March 30, 2010 3:52 PM

Wouldn't it be funny if you gave these guys a deposit, the sales didn't materialize at the prices they needed, and so they filed for bankruptcy after sending all the deposit money for interest payments, leaving them with $0 to return to you.

Ha, ha, that sure would be a barrell of laughs...

Posted by: tipster at March 30, 2010 4:32 PM

$300/mo for valet parking. Ouch. I wonder how much the HOAs will be.

Posted by: joh at March 30, 2010 4:33 PM

$300k for valet + car payment + gas + insurance + maintenance = just get a limo.

Posted by: J at March 30, 2010 4:41 PM

Looking at the floor plans, it looks like some of the junior 1br units can be converted to a pseudo-1BR with the addition of a wall (a conversion impossible for many studio-type floor plans). I'm going to guess that the reason why the builders didn't enclose the sleeping alcoves is due to the lack of windows in that space.

At least one of the junior 1BRs are quite large (#2J at 794 sqft), and even comes equipped with a den.

Posted by: joh at March 30, 2010 4:41 PM

@ tipster

you think those are ballpark prices? If the developer really wants to move these units, i'd hope the prices are near market. Although can't complain about the location(besides Gold Club).

Posted by: Moon at March 30, 2010 4:44 PM

I wonder if they'll charge a surcharge for parking rights. 829 Folsom and 555 Bartlett are two examples of properties that charge something like $40K for the right to rent a space, in addition to the monthly parking fee.

Posted by: joh at March 30, 2010 4:45 PM

I really like the location. It's so much better than One Rincon. You are in the middle of the city, unlike ORH which at the moment feels like an isolated outpost. The lower level 2 bedroom floor plans online don't look the best but I'll reserve final judgement after an in person visit. Not having deeded parking is going to also be considered a negative by a significant number of potential buyers and it will have to be reflected in the pricing if the developers expect these units to move. SF BLU is probably still a better bet for a 2 bedroom unit but if you're interested in something smaller this may be worth considering.

Posted by: Willow at March 30, 2010 4:51 PM

$300 for valet + car payment + gas + insurance + maintenance = just spend a month each year in Paris and get over not having a car.

Too bad they just have the lower 1-7 floor plans (punched opening windows versus curtain wall above) posted. That upper floor corner unit looks like the one to have.

Posted by: redseca2 at March 30, 2010 5:25 PM

Buddy, classy AND joint all in one sentence!

Walk to movies museums etc..great location
vbrwon bag lunch at moma rooftop, and say a prayer of gratitude for mario's wonderful MOMA bulding design.

Posted by: kathleen at March 30, 2010 7:56 PM

I loved a block away from this location for a year - it's far from ideal IMO. The neighborhood is dead on the weekend.

Posted by: lolcat_94123 at March 30, 2010 11:32 PM

This is a great location and I live a few blocks away brannan. You are near everything. On weekends? Everything is right here. The city's best urban park, Yerba Buena is a block away, with all the museums, movie theaters and restaurants around it. Westfield is two blocks away and then there's Union Square shopping. And since you are south of market, you aren't trapped in the marina all the time (like locat_94123) as it's easy to drive everywhere, although MUNI and BART are nearby, too.

Posted by: ARMS at March 31, 2010 7:46 AM

I will be curious to see how many condos on the 8th floor have patios. It appears that there are two on the north side.

Does anyone who has been to the sales office have any additional information?

Posted by: RSVP at March 31, 2010 8:54 AM

Also...on the weekends you have Roe nightclub next door, as well as the restaurant that replaced 'TWO' right next door.

Thirsty bear brewery is next to Roe, you have a great bar at the W hotel a block away, Temple nightclub is a couple blocks away and there's a Chevys within a block.
Plus you can't forget the Gold Club right across the street. A rather upscale gentlemen's club.
Also within a couple of blocks is Harlot nightclub, Salthouse, etc.

This area certainly is NOT dead on the weekend. The person who says it's dead must not go out at night.

Posted by: steve at March 31, 2010 10:30 AM

Also...on the weekends you have Roe nightclub next door, as well as the restaurant that replaced 'TWO' right next door.

Thirsty bear brewery is next to Roe, you have a great bar at the W hotel a block away, Temple nightclub is a couple blocks away and there's a Chevys within a block.
Plus you can't forget the Gold Club right across the street. A rather upscale gentlemen's club.
Also within a couple of blocks is Harlot nightclub, Salthouse, etc.

This area certainly is NOT dead on the weekend. The person who says it's dead must not go out at night.

Posted by: steve at March 31, 2010 10:30 AM

@RSVP: I think its just the two huge patios on the north side (those patios are ginormous).

Posted by: SFRE at March 31, 2010 10:49 AM

This area is not dead on weekends - I went to dinner at Anchor & Hope a few months ago and walked to the W. I was pleasantly surprised at the number of people walking around on a Saturday night.

Posted by: Fishchum at March 31, 2010 12:58 PM

broker event on the 19th and 20th - But does anyone know when regular people would be able to tour?

Posted by: Moon at March 31, 2010 1:07 PM

Does anyone know if a building like this would have earthquake insurance? All that glass makes it look like a seismic hazard, and I wasn't sure if the newer buildings had it.

Posted by: Mr. Jones at March 31, 2010 2:34 PM

Forget about Tipster's already generous assumption on pricing.
Say if we use 2006-07 peak pricing for these units:

59 2 bedroom @ 900k (average) = 53.1 m

74 1 bedroom @ 700k = 51.8 m

26 jr. 1 bedroom @ 600k = 15.6 m Total 120.5 m ( loan amount )

Assuming the developer has ZERO cash investment, that leaves the six penthouse units as profit. If you sold them at 3m a piece for 18m and then take out sale commission of 7m (5%) and interest of 3m (5%) for five years, you are left with a net pretax profit of only 8m. That return for investment is ridiculous. What developer, worse - lender would go for a project that has NO profit potential ? May be the loan amount is wrong.

Posted by: Outsider at March 31, 2010 3:11 PM

Posted by: anon at March 31, 2010 3:34 PM

I am assuming the lenders would have to approve the pricing on the units - hence the equivalent of an agreed short sell as there is no way the lender will get back all their money. Instead of getting back a half baked project, the lenders would be wise to continue the funding and take the loss based on the current market price on condo units. They would be lucky if they get close to 80% of their 120m loan - although considering all, that isn't nearly as bad as most other untimely commercial or residencial projects simply because it is in San Francisco instead of say in Las Vagas or Atlanta...

Posted by: Outsider at March 31, 2010 3:54 PM

I recently moved to this neighborhood and LOVE it - everything is within walking distance including the Muni/Bart station. Since it is downtown, the weekend 'vibe' is different from Monday-Friday but that is a good thing - it is a bit more quiet on the weekend, a nice break from the hustle and bustle of the rest of the week. To me this is the best area in 'SOMA' -- it is more connected to the city and less of an extension of the suburbs (like near the CalTrain station). This is an area that is only going to get better over the next few years especially if the Transbay projects actually happen.

Posted by: riffsf at March 31, 2010 10:03 PM

I've been waiting for Hawthorne to open up. Me and my partner are currently looking for a new condo in the soma area. We toured the sales office twice already. If we want a new condo now, the only thing available is over at Blu and 829 Folsom and we are not impressed with either of them. Blu has units in the $600k but they look directly into an office building and I am not a fan of using a car stacker. 829 Folsom is a clear competition with Blu but the design of the building is lacking. Both buildings and location are very comparable. Plus the HOA is $200 more at Blu compared to 829 Folsom and you get nothing. Folsom has a nice rooftop.

I hope the sales team at Hawthorne gets everything together. There's nothing left in the new condo market. Blu is 55% sold still and Folsom is at 30%

Posted by: climber at April 1, 2010 10:11 AM

I dont think the HOA is $200 more at Blu. I would recommend double checking that.

Posted by: SFRE at April 1, 2010 10:17 AM

Def agree with climber on the Blu and 829 Folsom comparison other than the HOAs. But it's important for the developer/sales team to price these units appropriately since they need to fulfill a certain % (40%, maybe) of the Phase 1 sales in order to market the rest of the building. Location and the fact that they are the only new development this year is great, but off market prices will not help sell these units.

Posted by: Moon at April 1, 2010 10:30 AM

Sorry, the there's a difference of $150 for the HOA between Blu and 829 Folsom. Either way, both building are very comparable in design, location and overall appeal. That's why I think they are both sitting at the same % sold.

I'm looking forward to getting a tour with my broker in April.

Posted by: climber at April 1, 2010 10:54 AM

I thought the HOAs for a 2-bd at 829 Folsom was nearly $600.

Posted by: SFRE at April 1, 2010 11:04 AM

Has anyone really looked at these floor plans?

Have any of you on this site lived in Chicago, DC, NY, Boston, LA, San Diego or any other city that doesn't treat homebuyers like sh*t? For sh*tty product? And here they lap it up. What gives?

After wading through the Amateur Night webiste staring at numbers going by, I finally got to the plans. When did a 4 foot alcove become a Den?

And check out the bedroom with no bed wall!

This buidling is so desirable that people are waiting for months for pricing and a "VIP" broker tour?

This is so pathetic.

Posted by: MB Pioneer at April 1, 2010 1:44 PM

Where did you see a bedroom with no bed wall (which plan)?

Posted by: SFRE at April 1, 2010 3:06 PM

The bank will own this project by July 1st. Prices will then be reduced to about $600 PSF and the units will sell.

The bank is already negotiating with a team to handle marketing and sales. This project can't repay the construction loan and the bank is apparently going to act swiftly.

If you want to buy, wait until July. The prices will be 30% lower.

Posted by: GoldRush at April 2, 2010 8:05 AM

@GoldRush: Highly unlikely. People have been saying that for 829 Folsom a much more undesirable property, and they have been slowly selling.

Posted by: SFRE at April 2, 2010 9:25 AM

Really Doubtful these will be $600 a sq. foot in July. Even 829 isn't that price, and as indicated above, it isn't nearly as desirable.

Posted by: Chris at April 2, 2010 12:43 PM

Its funny. All the conversation used to be around how things would reach $400 psft. And now, its up to $600 psft.

Posted by: SFRE at April 2, 2010 1:25 PM

Where did you see a bedroom with no bed wall (which plan)?

I think MBP was referring to the Jr 1br plans.

Posted by: joh at April 2, 2010 5:05 PM

Of course Jr. 1br plans may not have a wall. That is why its called "Jr." That is nothing specific to this building.

Posted by: SFRE at April 2, 2010 5:55 PM

"This buidling is so desirable that people are waiting for months for pricing and a "VIP" broker tour?"

Perhaps the developer and/or the sales office playing a little to the bit around people wanting things they can't have? By delaying the release of the first phase, delaying the pricing, etc., they are simultaneously 1) Building a sense of anticipation (heck some prospective buyers are apparently fully primed already, e.g. climber), and 2) Seeing some of the competition's inventory burn off so that there will be less they'll have to go head-to-head (not that there are direct true comps to this property admittedly) on in the future.

It's not working for me; I've already gotten over the downsides re the floorplans and parking. But in the end, this could just be a very clever and strategic play of their hand.

Posted by: GoodBuyBadTimes at April 2, 2010 6:49 PM

I think I'll have to continue leasing a studio a few blocks east of here. Cannot afford those HOAs + house payment. What do people do for a living who would be buying these places?

Posted by: dkzody at April 3, 2010 9:03 AM

I toured this place back in Feb. They did a great job with the building, paid close attention to detail, corner units are amazing.

Posted by: jjjb at April 8, 2010 5:12 PM

the hoa dues are a joke, over 900 might as well but at the Mil. Plus I hear the developers are total aHoles! shocker - you still cant buy anything over the 9th floor. This project is going back to the bank FO SHO plus they re-hired the infinity sales team so can you say FIRE SALE??!!

Posted by: Karen Whatson at August 21, 2010 7:12 PM

You mean $600 HOA + $300 for parking then?

Any updated pricing?

Posted by: J at August 23, 2010 8:44 AM

Post a comment


(required - will be published)


(required - will not be published, sold, or shared)


(optional - your "Posted by" name will link to this URL)

Remember Me?

(you may use HTML tags for style)


Continue Perusing SocketSite:

« And If Rates Jumped Two Points? They'd Still Be Historically Cheap. | HOME | New Designs For Dwellings (And Retail) At Market And Sanchez »