August 26, 2013
A Day Late To Easily Convert, So What's The New Vacancy Worth?
With two of three units vacant, the triplex at 1281-1285 Filbert Street was listed for $1,499,000 this past April and sold for $2,000,000 within two weeks. Having occupied the top floor two-bedroom since 2003, the tenant was paying $2,337 a month in rent.
In June, San Francisco’s Condominium Lottery Bypass was adopted, restricting the condo conversion of TIC units which weren't occupied by the converting owners of record on April 15, 2013. The purchase of 1281-1285 Filbert closed escrow on April 16.
Last month the triplex returned to the market listed for $2,795,000 without any substantive changes to the building save one: all three units are now listed as vacant. No word on what the tenant was offered to move, but we're guessing less than $795,000.
∙ Listing: 1281-1285 Filbert Street - $2,795,000 [via Redfin]
∙ Condo Conversions: The Clock Is Ticking For The Mayor To Act [SocketSite]
First Published: August 26, 2013 2:00 PM
Comments from "Plugged In" Readers
I'd be amazed if this property is worth more now than when the tenant was in place. Figure the tenant buyout at $50,000. But what else has changed? Back in early April, when this property last went into contract, there was little reason to think that the condo lottery would be suspended for 10+ years. That proposal was brought forth in mid-April, and is now the law. I would expect the loss in value from suspension of the lottery to greatly exceed the cost of buying out a tenant.
Posted by: observant neighbor at August 26, 2013 2:37 PM
Tenant buyouts are going to happen a LOT less frequently now (after the condo conversion changes), and my guess is that when they do happen, the payout will be a lot less. More common will be to just Ellis buildings and move on. Owners don't have condo conversion as a realistic opportunity going forward, so there is no reason to pay tenants to move - easier just to Ellis them. Tenants can thank the tenants union for that.
Posted by: Mike at August 27, 2013 11:28 AM
Posted by: 49yo hipster at August 27, 2013 12:28 PM
Not sure who is more dumb: the Agent or Owner. They overpaid for the property in April and now there fishing for a fool to overpay again.
Posted by: highflyingagent at August 30, 2013 10:57 PM
Went pending last week. I'm sure it wasn't at asking, but I'm pretty sure it's well above what they paid in April.
Regarding the first comment. A large top floor 2 bed in Russian Hill is worth way more than $2,300 a month, I would bet it can rent for over $4,000 a month. Who knows what it actually cost to get the tenant out, but even $50K would be worth it, you would make the money back in about 3 years.
Posted by: lyqwyd at September 13, 2013 5:22 PM
A good 2BR in Russian hill is way over $5k month, probably closer to $6k.
Posted by: Skirunman at September 14, 2013 4:18 PM