(This article originally appeared on July 6, 2015)
By Caleb Pershan, SFist
One Rincon Hill's north tower isn't just an apartment building. It's a record-setting apartment building lifestyle.
Its height? Nearly incomparable in the Bay Area. Its beauty? Unparalleled. Its glory? Unfathomable. To put a price on such luxury would be demeaning. But, as The Business Times hears from anonymous sources, someone will be doing just that, buying the tower from current owners Urban Pacific Investors and Principal Real Estate Investors to likely set a new record for the highest price-per-unit sale of an apartment building since 2007(!).
The buyer of the newer, shorter north tower of One Rincon Hill is said to be a partnership between Rockpoint Group and Maximus Real Estate Partners, infamous for their controversial 16th Street BART "Monster in the Mission" development proposal. And the deal price is said to be in the neighborhood of $400 million.
It's also a first, because none of the city's other five tallest residential buildings has ever been sold after construction. One Rincon Hill's 49-story apartment tower opened last year, and as CBS SF also notes, most of its units have sat empty despite an enticing average apartment rental price of $6027. Yes, that is among the highest in the city, making Twitter neighbor NEMA look rather affordable by contrast.
For $400 million, Rockpoint and Maximus will be paying about $1.3 million for each of the 298 units. But it's then that they hope to work their magic. “A new owner would be able to capitalize on the booming luxury, for-sale demand” with a supply of new condo buildings that won’t get built until 2017 or later, according to the sellers’ brochure. As the Business Times remarks, "condo conversion is an ace in the hole."
The Rincon Hill neighborhood is also home to high-profile towers like Tishman Speyer’s Lumina and Infinity, as well as the first One Rincon tower, which has 396 condos selling for $1.6 million on average... Its sister tower’s sales success likely bodes well for the north tower to start selling units quickly.
The building’s brochure, compiled by Eastdil Secured anticipates average units selling for $1,600 a square foot or $1.8 million total — racking up $550 million of sales proceeds by 2017. It expects about $4 million of renovation costs over the next couple of years, likely to improve units’ finishes and common area upgrades.
But who's buying?
Matt Finley, a realtor for Climb Real Estate, said he has sold dozens of units at the One Rincon south tower as one of the original listing agents last decade. He said he recently sold an upper-floor unit for about $1,600 a square foot. About 30 percent of his sales have gone to overseas buyers, who purchase as investments or for family members, he said.
As Paragon Real Estate Group reports, the highest per-unit price on average in 2014 was $453,000 for apartment buildings in Pacific Heights of buildings of 6 or more units. But that's old money — this is Rincon money.
This sale is likely to be followed by the sale of the luxury rental NEMA building for condo conversion, and it follows on news that a penthouse condo at the nearby LUMINA building was listed for a whopping $49 million. We won't know what the closing price will be until construction is complete.