As noted by a plugged-in tipster, the buyers of a $5.85 million, two-bedroom unit on the 55th floor of the new tower at 181 Fremont Street have just filed suit against the tower’s development team, agents and brokers involved in the sale back in late 2016, claiming fraud, deceit and negligence.

According to the suit, which was filed in San Francisco Superior Court, the defendants “failed to disclose that the spectacular views from the condominium they were selling [and the plaintiffs purchased] could be potentially blocked by neighboring developments,” specially on Transbay Block 4, which was zoned for development up to 450 feet in height, and that the sales team hid the fact that “the 55th floor” of the tower “is actually the 42nd floor since the building is missing 13 stories.”

In addition, the suit alleges that the sales team subsequently misrepresented the pace of sales in the building, circa 2017, in order to ensure the buyers closed escrow.

As such, the owners of 181 Fremont Street #55B are now seeking damages of “no less than $3,000,000,” along with a requested trebling of said damages, based on the claimed fraud, and the recovery of all attorney’s fees.

At the same time, the three-bedroom unit #60A at 181 Fremont, which was purchased for $5,772,672 in May of 2018, remodeled and then returned to the market listed for $6.465 million last year, doesn’t appear to have found a buyer despite having been reduced to a sub-2018 price of $5.595 million six months ago.

We’ll keep you posted and plugged-in.

UPDATE (5/13): And on Monday, which was the next business day after we highlighted the case and five days after it was filed, the Plaintiff’s attorney requested that the entire complaint be dismissed.

Comments from Plugged-In Readers

  1. Posted by Jeffrey W. Baker

    I don’t know anything about the law, but advertising the 42nd floor as the 55th floor is just dishonest on its face. I don’t know what is wrong with people in the real estate business; this kind of marketing is plainly unethical.

    • Posted by crying billionaire

      It took 4 years for the plaintiffs to figure out they weren’t really 55 stories up? Seems like I would have figured that out the day that I viewed the unit.

      • Posted by Notcom

        In these troubled times, I’m just so glad someone was able to find a way to bring a little mirth into our lives
        🙂

  2. Posted by kiss me deadly

    Wait until they discover the height limits on the Foundry Square buildings.

  3. Posted by Turin

    Block 4 is 750 feet, not 450. But it’s two blocks away. Sorry, the seller can’t be responsible for future buildings 2 blocks away — your view isn’t protected and you should do your own research if it’s worth $3M to you. Don’t know what to say about the floor thing though. That’s pretty weird. Lots of buildings skip the 13th (or the 4th in Asia), so floor numbers are often not real above those levels. But how do you knock out 13 floors?

    • Posted by SocketSite

      That’s incorrect. Block 4 is zoned for 450 feet in height. Parcel F, the purchase of which was conditioned upon the acquisition of Block 4, is zoned for 750 feet in height.

      • Posted by Turin

        Oops, sorry, I read block 4 but my mind went to Parcel F for some reason. Thanks for clarifying my statement.

        Same conclusion applies to block 4 though. Your views aren’t protected and it was known block 4 was going to be 450 in 2016. Maybe the buyer should have been reading SocketSite!

  4. Posted by Tony

    “Investor Angry Skyscraper Condo Exists In City With Other Buildings”

  5. Posted by Dave

    The zoning for the temporary transit site was known when they purchased the unit. Did the buyers do their due diligence? How did they miss that their unit wasn’t really 55 stories up? In any case my undeststanding is that views are not protected. Didn’t residents of the Four Seasons try to stop the tower atop the Mexican Museum as it would block views?

    All that said, It’s unlikely Parcel F moves forward anytime soon and the 450 ft zoned parcel tied to it may not see development for 10, 15, or more years. Who knows. There is not in any way an imminent threat to the plaintiff’s views. Don’t see them prevailing in court.

    • Posted by hmmm

      “Did the buyers do their due diligence?”

      Exactly. It’s the responsibility of the buyer to do their due diligence about the zoning and plans around the property they are going to buy. This buyer may be so helpless that they depend on others to spoon feed them every ounce of information they need, but it’s not the seller’s responsibility to point out that towers could be built around them in downtown SF. On top of that, even if the surrounding zoning didn’t allow towers when they bought it, the City could change the zoning. There are no guarantees to views, period.

    • Posted by Orland

      According to an SFBT story dated today, Parcel F obtained Planning’s approval in late ’19 and is awaiting BOS action with a 2020 ground-breaking expected.

      • Posted by Dave

        We’ll see. The hotel component may be a non-starter given the situation. It is hard to envision a 2020 groundbreaking.

    • Posted by Nick

      Their unit IS 55 stories up, it’s just not on the 55th floor, as the commercial floors are in several cases double height, and offices generally have higher ceilings than typical residential ceiling heights.

  6. Posted by Moratorium

    The view argument is stupid but they should be able to sue for the 42nd, 55th floor issue.

    • Posted by Pablito

      Agreed.

    • Posted by jimbo

      they wouldve know is was flr 42 instead of 55 when they toured the building (before they bought)

      • Posted by Nick

        The building was probably not yet finished when they bought. The fire Marshall didn’t make inspections until after the building was completed. Both buyers and developer had to reset their expectations after the fire Marshall made their determination on how the elevator buttons should be labeled. In their original plans, the elevators would have been labeled with their own number sequence, in accordance with elevation/story from the top down, and treated completely separate from the office side. The building is indeed 70 stories. There just aren’t 70 floors.

      • Posted by L'UrbanistaSF

        I remember when the building was topped out the folks over at Curbed were invited for a tour. Curbed reporter wrote that the building was 70 stories. When challenged he got a quote from the 181 Fremont marketing folks stating it was 70 stories. Talk about the fox guarding the henhouse. I can’t believe how gullible some folks are.

  7. Posted by TBK

    If you follow the trail of links, you’ll see that the building was reduced in height down to 52 stories at least 7 years ago. So how can the buyer claim that they were told their unit was on the 55th floor?

    • Posted by oakland lover

      could you imagine how much better the skyline would look if this beauty was 1400ft or 1200ft, or at least tall than the sales force phallic? I cant wait for oceanwide to come up.

    • Posted by SocketSite

      While the tower at 181 Fremont has 52 stories, which shouldn’t catch any plugged-in readers by surprise, the first residential floor on the 38th story of the building, was numbered and marketed as the “54th” floor, with the Grand Penthouse on the “70th floor,” rationalized by the fact that the vertical heights and views from the floors would be equivalent to those of a 70-story residential building on the site.

  8. Posted by The Milkshake of Despair

    I’d like to know how the developer justified skipping 13 floor numbers. Skipping a single unlucky floor is odd but fairly common. But 13 floors?

    • Posted by SocketSite

      As we noted above, “the first residential floor on the 38th story of the building, was numbered and marketed as the “54th” floor, with the Grand Penthouse on the “70th floor,” rationalized by the fact that the vertical heights and views from the floors would be equivalent to those of a 70-story residential building on the site.”

      • Posted by sockettome

        Alternative Facts

      • Posted by The Milkshake of Despair

        Thanks. I find that justification quite reasonable. When considering views, what maters most is the elevation, not the number of floors below. Given that mixed commercial/residential/hotel buildings might become more common it probably makes sense for sellers to describe the height above the front entry in addition to all of the other statistics like square footage. Perhaps they already do.

      • Posted by Nick

        The first residential floor is on 55-13 = 43, and I believe there’s no 13th floor, so I guess technically that would make it 42. There’s a club level for the residents on 39. Offices below.

      • Posted by L'UrbanistaSF

        And the SFFD is about to lower the boom on this BS as it makes their job much more difficult to do. Real Estate folk have been doing this in Manhattan for ages, and the practice needs to stop.

    • Posted by Nick

      I think it’s because the commercial section has vastly differing ceiling heights than those of the residences.

      The Fire Marshall’s inspection ruled that the elevators between the commercial and residential sections should be in numerical sequence, even though they function separately, mainly attributed to the fact that the elevators there are the first-ever “Evacuation Safe” elevators in the United States. Being the first, it would thus set precedents for how future elevators of this kind would be planned.

      The floors in the residential section were labeled in relation to their height elevation, were registered with the postal system and the city record as such, prior to the building’s completion. The fire Marshall’s ruling came along after the fact.

      A lot of prospective buyers went to an off-site presentation suite to learn about the building, when it was mostly conceptual and a yet-to-be-finished product.

      • Posted by sockettome

        “I think it’s because the commercial section has vastly differing ceiling heights than those of the residences.”
        The math does not seem to support that. Using the elevation drawing on the SocketSite link:

        Commercial: height of 490 feet divided by 38 floors = 12.9 feet floor to floor – 2.0 foot (estimated) floor/ceiling assembly = 10.9 foot ceiling height.

        Residential: 700 feet minus 520 feet = 180 feet divided by 14 floors = 12.8 feet floor to floor – 2.0 foot (estimated) floor/ceiling assembly = 10.8 foot ceiling height.

  9. Posted by Jessie Camp

    Absolute scum-filled missive, from the buyers to the sellers. I need a shower after reading this insane bit of rich fool frippery.

    • Posted by Jacobs

      Wow! Someone seems to have a lot of anger and self hatred.

  10. Posted by John

    well that calculation of floor number does seem deceitful… and just plain silly…

    But I can’t imagine anyone naive enough to think that living in the downtown of a rapidly growing city would mean that your views would remain forever unchanged or unblocked… that’s just plain dumb.

  11. Posted by Neighborhood Activist

    Caveat emptor. When you’re going to spend millions for a piece of real estate, it’s incumbent on the buyer to do their homework and research nearby zoned heights if views are a concern. Even that’s not a complete guarantee, as height limits can be changed.

    While I think the intentional misnumbering of the floors is a bit sleazy, there’s little doubt in my mind that it was disclosed at the time of sale and that, somewhere in the stack of papers the buyer signed at closing, there’s something acknowledging that peculiar issue.

    Sadly, there are no shortage of buyers in SF with far more dollars than sense or experience, so it’s certainly possible these people did no due diligence, signed all the documents without reading them, and are now suffering buyer’s remorse. But that certainly doesn’t mean the court should give them the time of day. I hope this thing is dismissed for a pittance before trial.

  12. Posted by Anonymous

    This lawsuit is going to (rightly) fail and these jokers are going to be out the attorney’s fees for the defendants as well.

  13. Posted by Wiseguy

    Reminds me of when I lived in the SomaGrand and the owners were INFURIATED about a nearby building going up potentially blocking, wait for it, their views of other buildings!

    Unless the owners of this unit find an email by the developer specifically stating they deliberately lied to them about this issue, the lawsuit is DOA.

  14. Posted by frozentoast

    The buyer thought it would be worth more than 5.85M by now and bet wrong. I just see this just as a desperate play to try and get something back from the developer.

  15. Posted by RL

    I doubt if they would be happier if they had bought on the 55th floor of the Millennium Tower which is the actual 55th floor.

    • Posted by Nick

      Yes, that’s true about MT, although there’s no 13th or 44th floor, cautionary numbers to the superstitious. Ergo, some might argue that 55 is technically 53.

      • Posted by Notcom

        They needed to omit a whole lot more than two floors to avoid bad fortune.

  16. Posted by Brisket

    If you read the Complaint it state that the buyers bought the unit before the building was completed. But it also states that they became aware of the floor discrepancy during the closing, but nonetheless went forward with the purchase. They could have bailed at that time. That admission in the pleadings will sink them.

  17. Posted by Frisco

    Not to get political, but someone we all know sold a 90th floor penthouse on a 72 story building with the same rationale.

  18. Posted by Nick

    I think the developer should just revise the floors to match what the elevator buttons say (which was regulated by the Fire Marshall). The elevators are numbered sequentially by physical floor, with no differentiating between the commercial section and the residential section (even though they are separate and have vastly different ceiling heights).

    If you’ve ever been to the Four Seasons in Las Vegas, it’s the same idea – sits atop the Mandalay Bay, with separate entry and lobby and elevator banks. The difference there, though, is that both entities are commercial, therefore not mixed-use, so there’s not a lot of variance in ceiling heights. When you’re dealing with commercial offices with also a component of the building dedicated for residences, ceiling heights vary dramatically.

    This developer was trying to account for the mixed-use nature of the building, as well as to highlight its staggering elevation. Most of homes there are higher up than any residential environment west of Chicago. It’s clear that Millennium has more total floors than 181, yet 181 is undeniably taller than MT. Salesforce Tower is an 80-story building with only 61 floors. But because it’s entirely commercial, not mixed use, there’s no confusion. I think the developer was trying to reconcile all of those aspects.

    Anyway, as I was saying, I think since the Fire Marshall ruled on how the Evacuation Safe elevators should be labeled, the unit numbers simply be revised to correspond with the floor indicated in the elevator. Just cut out the confusion. 57 floors spread across nearly 800 vertical feet; all you have to do is look at the building to see that it’s one of the tallest buildings on the west coast.

    • Posted by mvp

      Your argument sounds reasonable. However the height of the top floor is 673 ft with the rest being a screen and spire. That would average around 12ft ceilings and would place the “42nd” floor unit around the 504 ft mark. That does not seem to compare favorably with say One Rincon which is 50 stories and 541ft tall.

      • Posted by Notcom

        “developer was trying to account for the mixed-use nature of the building”…bull#$%^!!

        The developer was trying to make the building sound taller than it is, at least to the unsophisticated (who equate story-count with height). It’s little different than someone who is 4’3″ claiming they’re 6’5” b/c “my feet are shorter than 12”.

  19. Posted by Dave

    42 is the new 55 – or is it the other way around?

  20. Posted by Pablito

    A floor is a floor is a floor. Using this “height equivalency” method is nothing more than deceit.

  21. Posted by sfres

    Helps to actually read the complaint. Alleges the developers were told the views were critical for the buyers and expressly emphasized the views, and the developers affirmatively represented that the new construction would not negatively impact the views, knowing this was false. Alleges the developers presented false renderings of future developments that omitted those that would block the unit’s views. The 42nd vs 55th floor issue is added as another falsehood but not a critical part of the claim. Who knows if the complaint is truthful (it is not verified under oath but it does not have to be). But if it is, the buyers will win. No jury is going to side with developers who lied to make a sale, and the case will settle before it gets that far.

  22. Posted by Nick

    The developer has only ever dealt in commercial properties. This is his first foray into residential, and I guess he just doesn’t really know what he’s doing, or the nuances and sensitivities of dealing with people and cultivating a dwelling community.

  23. Posted by Jlasf

    If these issues are valid, then why isn’t this a class-action suit by other occupants? They were all misled by the floor numbers and, at least some, by the loss of view.

  24. Posted by Jim

    The only thing I don’t understand is how buyers that stupid were able to accumulate enough money to buy a $6m property.

    • Posted by Notcom

      Inheritance ?? It’s been fighting against natural selection for a long time now.

  25. Posted by Conifer

    It appears that the buyers may not have had representation prior to the closing. Or did their own broker and lawyer fail to inform them? What about the title company? People who spend this much money on a two-bedroom apartment would not ordinarily do it without some kind of professional advice.

    In France, the notaries would surely have explained the facts (not that there are any residential buildings of this size in Paris.)

  26. Posted by MDG399

    Ridiculous Lawsuit – Waste of The Court’s Time.

    • Posted by sockettome

      AuCon·traire!

      This is an extremely valuable use of the court’s time. It will set a standard for future developments, as to whether stories must be numbered according to the true floor or some other means that considers ceiling heights.

  27. Posted by Nick

    I’ve heard through the SF’s gossipy grapevine that the suit is not proceeding/has been dropped/never really took hold.

  28. Posted by SocketSite

    And in fact, on Monday, which was the next business day after we highlighted the case and five days after it was filed, the Plaintiff’s attorney requested that the entire complaint be dismissed.

  29. Posted by What is the main point here?

    What is the background story of why the plaintiff filed and then suddenly withdrew the complaint? Buyer’s remorse and then what?

    • Posted by Neighborhood Activist

      Maybe they read the comments here and realized we were representative of the potential jury pool.

  30. Posted by Mike

    The Fire Marshall will tell you what floor it will be.
    That is what floor it will be. Nothing else.

    • Posted by Nick

      Yeah, the developer should revise the unit numbers to match the elevator. “70” – 13 = 57. The PH on 57 is still gonna be 700+ft high above the ground, regardless. End the confusion with the bizarre differential of 13! Could be confusing or even dangerous in the event of an emergency!

    • Posted by sockettome

      Nick – What gives?

      So far you have commented 9 times on this posting. You sound like a PR person trying to put out some upside spin for the conniving developer.

      A few of your gems:

      “their unit IS 55 stories up, it’s just not on the 55th floor”
      “the building is indeed 70 stories. There just aren’t 70 floors”
      “the building was probably not yet finished when they bought”
      “it’s because the commercial section has vastly differing ceiling heights than those of the residences”
      “the developer has only ever dealt in commercial properties”

      As for the ceiling height issue, I laid it out for you in a previous comment. You brushed it off.

      “I think it’s because the commercial section has vastly differing ceiling heights than those of the residences.”
      The math does not seem to support that. Using the elevation drawing on the SocketSite link:
      Commercial: height of 490 feet divided by 38 floors = 12.9 feet floor to floor – 2.0 foot (estimated) floor/ceiling assembly = 10.9 foot ceiling height.
      Residential: 700 feet minus 520 feet = 180 feet divided by 14 floors = 12.8 feet floor to floor – 2.0 foot (estimated) floor/ceiling assembly = 10.8 foot ceiling height.

      And now this morning, you are completely deflated: “Yeah, the developer should revise the unit numbers to match the elevator. “70” – 13 = 57. The PH on 57 is still gonna be 700+ft high above the ground, regardless. End the confusion with the bizarre differential of 13! Could be confusing or even dangerous in the event of an emergency!”

  31. Posted by Nick

    Just an observer with nuanced views. No affiliation of any kind. I’m an architectural student who’s fascinated by and well-read on the project. Been inside the building (once on the commercial side as a guest of an Instagram employee, and once on the residential side for a party).

  32. Posted by Nick

    Also on a hard-hat tour as part of a student field trip when it was a construction site. The explanation about the floors and elevations given by the builders made sense when I was on-site. It’s an impressive structure with incredible innovation and safety standards. Only problem I see is the developer being stubborn about how they label the residential units. If they would just match them with their actual physical floor number, it wouldn’t seem so bizarre! The apartments are all above 500 ft from the street level, so it’s not like they’re pretending the apartments are higher up than they are. The amenities floor I believe is on 39 (although technically 38 since there’s the customary omission of the 13th floor), which has a double-height outdoor terrace that is breathtaking. That floor us undoubtedly 500+ ft above the street, unless all the other buildings in SF are also faking their measurements.

    • Posted by sockettome

      OK…thank you for your reply. It would be nice then, if you shed some light on just how your statements are established. Your most recent – “it’s not like they’re pretending the apartments are higher up than they are”

      Seriously? Pretending is exactly what they are doing.

      • Posted by Nick

        How would they pretend? The apartments can’t pretend what elevation they are at. They may be absurd for an illogical numbering sequence since they don’t match them to the floor count, but that doesn’t take away the plane they exist on. Most apartments in the downtown area have ceiling heights between 8-9.5 ft. I believe at MT, they are mostly between 8.5 and 9 ft (add 1 ft to account for concrete and structural aspects) until you reach the 49th floor, where they are around 10-10.5 ft, and then the penthouse floors are around 11-11.5 ft. If this mixed use building at 181 were all residential floors, most of them (except the top few floors) would be 8.5-9ft high, setting the complainant’s apartment “55B” more or less parallel to MT’s version of the 55th floor. MT skips the 13th and 44th floors, yet the top floor is still considered the 60th floor. 181’s commercial side has a lot more variance in their heights, with a lobby that soars at least 22 feet high, and offices with at least 12 ft of ceiling height each. It also skips the usual 13th floor (and you know that office floors are generally higher than those of residential floors), which is puts floor 14 about 12-14 feet lower than the actual 14th story. In any case, it does work out that the apartments begin over 500 ft above street level. Anyone can see that, and anyone with the tools could measure it. The building isn’t hiding anything about its height. If you didn’t already know, a “story” is a horizontal division of a building’s exterior, not necessarily corresponding exactly with the floors within. If the developer didn’t insist on numbering the units based on stories, but instead on the number of floors, then there wouldn’t be a dispute. As I’ve said before, the developer was trying to reconcile the varying ceiling heights within a mixed use building, while also promoting the staggering elevation of the residences. The apartments are ridiculously mislabeled. They’re not pretending to be higher up than they are.

        • Posted by SocketSite

          But once again, the tower has neither 70 floors nor 70 stories and the residential units were numbered for the purposes of marketing and buyer cachet based on a rationalization that the vertical heights and views from the residential floors would be equivalent to those of the 54th to 70th floor of a theoretical 70-story residential building on the site.

        • Posted by sockettome

          Definition of story:

          Nick: “a “story” is a horizontal division of a building’s exterior, not necessarily corresponding exactly with the floors within” Where do you get this definition from?

          Wikipedia: A story is any level part of a building with a floor that could be used by people. The terms “floor”, “level”, or “deck” are used in a similar way, except that it is usual to talk of a “14-storey building”, but “the 14th floor”.

          California Building Code: “That portion of a building included between the upper surface of a floor and the upper surface of the floor or roof next above”

          They may not be pretending to be at a higher elevation in feet, but the condominiums were not marketed in height. They were marketed in stories and are pretending to be at a higher story that they are in reality. This particular unit was pretending to be an the 55th floor when in reality it’s on the 42nd floor.

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