As we first reported near the end of 2017:

When the hedge fund manager who lives in the 4,400-square-foot Presidio Heights home at the corner of Walnut and Jackson learned that the home next door at 3311 Jackson, a smaller 3,000-square-foot home which had been in the same family since being constructed in 1928, was going to be put up for sale at the end of 2013, an idea was hatched.

While the Jackson Street property had been pegged as a potential historic resource, a commissioned evaluation by Page & Turnbull has determined that the property “does not appear to be a historical resource.”

And as such, having purchased 3311 Jackson for $4.95 million in early 2014, the aforementioned manager is planning to demolish the home and rebuild upon the site, aligning the new building’s floor plates with his home at 101 Walnut and connecting the two structures internally to create a supersized single-family home measuring over 7,000 square feet, the formal application for which has just been submitted to Planning.

As we added in September of last year:

And with the aforementioned application having now been formally withdrawn, 3311 Jackson Street is now on the market as a “regal residence…filled with timeless finishes and appointments” and a $4.9 million price tag.

And the re-sale of the regal Presidio Heights residence at 3311 Jackson Street has now closed escrow with a contract price of $5.25 million, representing total appreciation of 6.1 percent since the first quarter of 2014 on a straight line basis, but multi-point trends would suggest a bigger up and down between.

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Comments from “Plugged-In” Readers

  1. Posted by denis

    This is the opposite of what we’ve seen on Chestnut or Franklin, because, obviously, this is a grade A location (though if it were north side and a couple of blocks west, the price could double). When the market turns down, inventory in prime Presidio/Pacific Heights dries up a bit while new inventory is coming on with slightly less lofty aspirations.

    I have some advice to the buyers: do as little as possible here. Conservatively update the kitchen and baths, and reconfigure the weird master bedroom. End of list. Oh, and paint the brick. Unless this is their 8th home and they have billions to spare and want to spend the next decade turning this into something palatial, fine. Or if they are experienced developers looking for a flip, go ahead. But otherwise avoid a major reno at all cost.

    • Posted by Anon

      Why do you say to avoid a major reno at all costs?

      • Posted by denis

        Well, the sellers are the neighbors, so I’m assuming what the buyers intend to do with the building was all worked out during escrow. I honestly have no idea and should’t speculate.

        To justify the cost of a reno, the buyers need to add square footage, and given the comparatively small size of the existing property, that could be astronomically expensive. First, the garage level and main level are two different grades, so trying to retrofit the building with new foundation, underpinning etc, could be very complex, especially if the buyers want to add extra square footage on the lower level. Likewise, adding another floor on top might trigger a DR from neighbors on Washington, Walnut, or Jackson, so expect to add months sorting this out. Also, after the various demos that have happened all over SF, the city will be inspecting everything that goes on here and will red tag anything that even appears to exceed scope of the permits. Finally, we haven’t sorted out our trade issues with China, so materials are still expensive and labor costs are completely out of control.

        The sale price looks like it sold at $1750 per foot. Let’s say the renovation costs a conservative 1k per foot without adding significant square footage, the sellers would likely have to sell at over 3k per foot to break even. Is that possible for this area? Sure! Is it a big risk, probably.

        If this is going to be their home for the next 20 years and they have money to burn, they can do whatever they want. Just keep in mind renovating in SF is not like renovating anywhere else in the country.

        • Posted by Anon

          Yea, I agree. That makes sense.

          I’ve always wondered though, why are people spending so much money to just stare at another building? Wouldn’t it be a much better use of money to get a nice view of golden gate or the bay bridge? There isn’t even much of a view of the park. I guess its really just a location play and that’s it. Maybe they have a huge family. But then even if you spend >3k/ft in Pac Heights with a view of the water and golden gate it’s just a very shallow horizon line of water in the view, and the golden gate bridge is so far away it’s not nearly as impactful as say in Sea Cliff when you’re right on the cliff and there’s a deep amount of water and the bridge is much closer. Or in south beach where you get a deep amount of water and you’re 5x+ closer to the bay bridge than the golden gate.

          • Posted by denis

            The odds of getting a north-side GG bridge view SFH from a main level even in D7 is extremely low and double the price of this place. What did 2900 Broadway sell for? Over/under 20 mm?

            That said, 2611 Divis is back at $4.25 a 3% increase from its 2016 sale (I haven’t checked permits to see if it’s an apple). It does have great views from the roof deck, but no garage. Likewise 2519 Broadway is on at 4.8. Great price for a great block, but only partial views of Alcatraz and it needs substantial work.

          • Posted by SocketSite

            While no major work has been completed on 2611 Divisadero since it traded hands for $4.125 million in 2016, plans to excavate its basement, including the addition of a new bathroom and roughly 1,000 square feet of finished space, have since been commissioned, approved and permitted.

          • Posted by SocketSite

            The sale of 2611 Divisadero has now closed escrow with a reported contract price of $4.38 million, including the newly commissioned, approved and permitted plans to excavate the home’s basement and add roughly 1,000 square feet of finished living space to the existing 3,500-square-foot home.

          • Posted by denis

            The editor’s comment re: 2611 Divis. ties in perfectly to this thread. If this property sells at asking, the sellers will take a loss. They went to all the trouble of obtaining permits to expand the building. Why not do the work if it added value?

          • Posted by tipster

            Owner is a partner at a big management consulting firm, and probably doesn’t want to spend the time, so he took it as far as he could without getting his hands dirty, to try to extract as much value as he could without living through/supervising/paying for a renovation.

          • Posted by denis

            Exactly. I was being a bit rhetorical. The owner took one look at what a renovation/expansion would cost and how long it would take and likely said, “Nope, I’m out. Good luck everybody.” The point being, instead of plunging ahead with a devastatingly expensive renovation, the owner decided to just drop the project altogether and sell. Which, I would, argue suggests they don’t foresee a future of endless appreciation that would justify/absorb the cost of the expansion.

          • Posted by Notcom

            “Paint the brick”

            Pourquoi? Isn’t brick – and I’m pretty sure we’re talkin’ real brick here, not brick “tile” – normally seen as an asset, and paint a constant maintenance issue ??

          • Posted by denis

            It doesn’t look like Edwardian brick at all. I think its a brick veneer, likely put on when the garage was installed or it wouldn’t match so well. So it’s not historical or structural. It’s also probably only on the facade because there’s not enough room in between the neighbors. If it were real brick, there would be a lot of tie backs to hold it on the structure or it could peel off in an earthquake. Painting brick has come a long way but can still go terribly wrong. My hometown has tons of 50’s 60’s brick ranch homes and usually before the homes hit the market they are painted a neutral color.

          • Posted by Notcom

            “Edwardian” ?? If you mean it isn’t a solid-brick wall, then I agree (the lack of headers is a reliable – if imperfect – indication). But I’ve no reason to think it’s not original to the house – after all, by 1928 most houses had garages – and more to the point, it’s damn nice looking…I think so, anyway.

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