1001 Van Ness Aerial

As we first reported earlier this year, KRON-TV’s parent company had placed its 1001 Van Ness Avenue building on the market, positioning the deal as “an opportunity to entitle and build over 200 units” on the Cathedral Hill parcel which is zoned for development up to 130 feet in height.

1001 Van Ness offering

Lo and behold, a joint venture between South Beach Partners and Oryx Partners has purchased the property for about $26 million, with plans to demolish the existing building which was designed by Gardner Daily and construct a mid-rise complex with about 200 housing units in its place.

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Comments from “Plugged-In” Readers

  1. Posted by soccermom

    I would love to hear any informed person’s pro-forma estimates for costs a project of this scale.

    Assume 200 units @ 1200sf(?)

    $26mm “dirt”
    $96mm = $400psf construction (including planning, permits, demo) * 200 * 1200sf
    ————————–
    $610K per unit, $508 psf basis?
    Done in (3-4?) years?

    • Posted by Dev Analyst

      Soccermom – you sound pretty informed yourself. Without knowing more I probably couldn’t give you a better estimate other than to say that your cost of construction should be based on whole building square footage not just the unit portion, i.e. Include hallways, ground floor commercial etc. commonly, this could make up 1/3 or more of building size. Also, you are forgetting affordable housing which in this case would amount to approx. $15 million in fees.

  2. Posted by taco

    Condos or apartments?

  3. Posted by poor.ass.millionaire

    You know the SF RE market is good, and is believed to continue to be good for the next few years when:

    - every day a new plot of land/development site transfers hands.

    • Posted by poor boy

      That’s true, PAM. Its amazing that RE firms are developing in mid 2014- with the project taking about 3 years to complete. I wonder if 2017 is this crazy or if the market cools a bit.

  4. Posted by poor.ass.millionaire

    Soc mom- yeah, build at $5-600 psf, sell at minimum $8-900. Da risk? 3-4 years from now.

    Probably for sale condos.

    • Posted by Realist

      Seems light at $130K per door. I’d say closer to $750-$800 psf all-in by the time it’s done

  5. Posted by Sierrajeff

    Disclaimer – I’m *not* saying this building is historic or a landmark. And I support up-building along Van Ness.

    That said – it’s too bad this mid-century piece will be destroyed and (inevitably) replaced with yet ahother boxy glass-bay-window apartment building.

    • Posted by sf

      “it’s too bad this mid-century piece will be destroyed and (inevitably) replaced with yet ahother boxy apartment building.”

      Which is exactly what they were saying about this “mid century piece” when it was built. In 40 years you will be fighting to preserve this period “boxy apartment building.”

      • Posted by Sierrajeff

        So? The same could be said of any period of architecture. The point is once a building is gone, it’s gone, and it’s nice to preserve certain specimens (which, once destroyed, will never be re-built).

        • Posted by anon

          Good riddance. This building is a gigantic eyesore and contributes to a horrible pedestrian experience in the area.

  6. Posted by Louis

    housing porduction cost is a bit more complicated.

    the total cost to produce a mid rise, condo finishes, on a sort of low end standard a la the marlowe on van ness, starting today is around $750 per sf (maybe higher) for all together land, approvals, hard, costs, soft costs, financing , fees and exactions.

    a contract sales price loses around 9% for commissions and other costs of sales before it lands in owner account.

    so a condo that sells for $1100 psf, nets say $1000 psf, and if the total cost was actually 750 psf that would be a profit of 250 psf over an investment period of probably 4-5 years, if the stars stay aligned.

    • Posted by soccermom

      On those numbers it seems like a better risk-reward for a sophisticated contractor than for a long-term speculative investment by the developer.

      Probably best of all to be part of the 9% of gross, 0% of capital-at-risk sales franchise.

    • Posted by Wai Yip Tung

      That’s scary. It means $800 psf is the floor price for any new construction that break even for the developer. There is really no such thing as “affordable” housing in San Francisco?

  7. Posted by BTinSF

    I don’t understand the 200 units part . . . on an entire city block at 130 ft. (which is about 13 floors of residential construction). There are existing buildings on Van Ness taking up an entire block with far more units (over 400). The estimate of 1200 sq ft per unit offered above makes sense only if nearly all the units are 2 bedrooms or more–typical 1 bedrooms in the city today are 800 sq ft or so.

  8. Posted by Joseph A

    I very much want the city of San Francisco to encourage housing towers with in a one block radius of both Northern & Southern Van Ness , is a great place to build housing that will easily flow to both BART & MUNI

  9. Posted by Mac

    Total costs for this deal will be well north of $900/SSF, including land, hard cost, all softs, BMR fees, const loan interest etc. Hope the condo market is not soft when they get their approvals.

  10. Posted by Brahma (incensed renter)

    If the market is “soft” when they get their approvals, they’ll just sit on the property and not develop it.

    Anyone who was around S.F. circa 2001 and again after the 2009 “downturns” saw any number of deployments of that tactic. There were some projects where the developer had already dug a huge whole in the ground and didn’t do anything else until the market “turned around”.

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