While the premise of the fictional Party of Five living in a $5 million house might seem a bit difficult to believe (in 1999 dollars no less), how about eight twentysomethings moving to an $8 million rental on San Francisco’s Billionaires Row?
Asking $9,495,000 for 2712 Broadway in February, the list price was quickly reduced to $7,750,000 for the Gold Coast home in need of some serious updating but with a big view.
In April the sale closed escrow with a recorded sales price of $7,800,000. The property soon thereafter landed on Craigslist as a rental asking $14,000 per month.
Purchased by a trio of investors who have either built or re-built a fair number of high-end spec homes in San Francisco, the rental route is intended as a “short-term” strategy to help with cash flow as permits and plans to redo the home are negotiated and secured.
The list price for the rental was reduced and then reduced a little bit more.
Last listed on Craigslist for $10,000, it rented for $9,250 after a bit of negotiation to a group of eight twentysomething friends who are now in the process of moving on up to Billionaires Row. But not to worry, two are a couple so everyone will effectively have their own room.
The renters are busy ripping up carpet, stripping old wallpaper, painting, and refinishing a few of the hardwood floors on their own dime. But they’ll be living on Upper Broadway for at least 15 months. And with an average rent of $1,150 each, they’re not overly concerned.
Their only real problem, how to secure enough furniture to fill all the rooms. And their landlord’s only real edict, don’t piss off the neighbors (see sentence about permits).
In terms of what this says about the state of the upper-end market, we’ll let you decide.
I can’t believe it, one of my predictions finally came true.
Those dudes are totally gonna get laid. Even the couple.
That place is gonna be one sweet shag pad.
Hysterical… I should’ve gotten in on this, and then conveniently “lose” my job. That way I could claim hardship and sue the landlord/developer for when he/she tries to evict me in the next year or so… or at least force them to pay a substantial relocation fee. Then, I could have lived there for free! Yippee! Yes, I know SFHs are excluded from certain regulations, but I’m sure the SFTU will help me get around those… especially if it means sticking to a “wealthy” developer.
P/E ratio of whopping 800. I suppose the tenant-financed remodeling will make up a bit. It is a great deal for tenants at $1150/mo, but I still would prefer to pay twice as much for a place of my own with as good a view. Sharing 6×12 kitchen with 7 others will be as bad as a hostel.
is that one of those cheapo Ikea chairs? Poang or something like that.
I remember a similar group living in the former Nigerian embassy about 20 years ago. Heard that it was fun, but it got old to find strangers wandering around the house all the time (party guests don’t always leave).
“Sharing 6×12 kitchen with 7 others will be as bad as a hostel.”
It depends on how well this group coordinates. It could work out great if they can rotate chef duties. Each member cooks dinner once a week and the economies of scale work in your favor. It is much easier to cook for eight once a week than to cook for one seven times a week.
I’ve lived in group houses this large and it all comes down to how well the group gets along and whether they can live communally. Discord can be an issue. If one person doesn’t play well it can cause the whole house to unravel. The best outcome is for the single dissenter to leave. That means each of the remaining crew has to absorb an extra $165 rent until a replacement is found : not too big of a burden.
The worst case however is if the dissenter is stubborn and causes two or more others to leave. That’s when the house unravels.
But with this much space it should be easier to maintain harmony. I wish the best to this group. It can be a lot of fun if everyone is cool to one another.
On the house, I see something odd in the floorplan. There are fireplaces in the living and dining rooms on the entry level. But notice the floorplan for the second level : where’s the flue ? I think that a past remodel rendered those two fireplaces inactive.
It’ll be fun for the first 3-5 months, then one or more of the group will stop playing along with the others and spoil it for everyone.
That’s how it always happens — someone will eat someone’s food out of the fridge or leave dirty dishes in the sink every single day, then they decide to start drawing a line on their milk carton (to “prove” their milk has been pilfered) or stop paying for the extra cable channels they don’t watch…. pretty soon there’s two guys having a drunken brawl in the living room and then everyone has to move out.
Not speaking from personal experience or anything …
But seriously, imagine having 7 of everything in the fridge. 7 milk cartons, 7 6-packs of beer, 7 bottles of champagne, etc. etc…. all labeled with your name.
Who does the cleaning? One person is always too cheap to pay for the cleaners and wants to do it themselves (even though they suck at it).
It’s a logistical nightmare … still, the views are sweet.
Gavin Coombs strikes again! There goes the neighborhood! LOL
I’ve seen enough episodes of the Real World to know that there will be drama on upper Broadway. I can’t help but wonder if any of the eight are hotties.
Not enough bathrooms … that’s when the cracks will begin to appear in the friendships as someone has to wait to get in the bathroom while the shower, or whatever, goes on and on and on.
It’d be a blast as a 20 year-old renter. As a forty-something owner, my blood pressure just went through the roof (and so did my banker’s).
bold move on the developers side. hope the neighbors don’t become haters on the SF communal spirit. OTOH neighbor’s may not contest the remodel, only to get rid of the ‘real world’ on their block. could be clever, could be a nightmare, but it certainly is a sign ‘o the times SF style (just like those temp structures proposed for octavia blvd. and all the renegade foodcarts popping up in the mish.) this recession sure sucks, but all these quirky side effects will hopefully help us remember a more positive(certainly innovative) side to it all. peace out.
“It depends on how well this group coordinates. It could work out great if they can rotate chef duties. Each member cooks dinner once a week and the economies of scale work in your favor. It is much easier to cook for eight once a week than to cook for one seven times a week.”
OK, make that “as bad as a commune”.
From my experience, finding even a single roommate that doesn’t drive you nuts within the first new months is difficult. I cannot imagine trying to live with 7 others. I wouldn’t mind giving it a try to live in this place though. Rent is about the same as my old place, where I also had to share with a roommate, and that was in san mateo.
Aw, some of you folks are too pessimistic. Yeah, this place could unravel in a cloud of discord.
But it could also turn out to an awesome experience for the group. Lifelong friendships with memories of those years living in an awesome house. Think of it, most people would have to wait until their 60s to earn enough to live in such a place.
Really, we don’t know anything about this group. They could be a Christian study group or an Al-Queda sleeper cell. No sense in projecting the future and I am as guilty as the rest on that one.
Nah…. they don’t have to worry about cooking and cleaning. All the houses on Outer Broadway have housekeepers and cooks. 🙂
They totally need one of these:
http://www.electricpig.co.uk/2008/09/11/electrolux-flatshare-fridge-designed-for-squabbling-students/
Don’t be so pessimistic. I lived in a beachhouse on the CT shoreline with 3 close friends sharing 1.5 baths, and it was the best 2 years of my life. You have those memories with your friends for the rest of your life. Sure, there were fights, but if you are truly great friends, you get over them.
If you are social and like spending time with friends, you spend a lot more quality time when you live together. Life is so busy these days that it is easy to see close friends less and less with everyone’s hectic schedules, esp. when you all live in opposite parts of a city.
Sure is cheaper than living solo, too.
Not a bad neighborhood either.
This group will have life-long memories, some negative, but mostly positive.
I’m sure the neighbors will be thrilled once the renters’ half dozen cars appear parked on the street, and the their party-bro friends start stopping by for drinks and guitar practice…
^Once the construction begins, 6 cars and some guitar practice is going to seem like the “good old days” for those neighbors.
I think they are in for several years of pure hell.
c’mon naysayers. this communal lifestyle will be an experience of a lifetime for these folks. haven’t any ya’all ever lived on a kibbutz (well, maybe some europeans reading this have.) these economic times have produced some strange juxtapositions and opportunities we normally would not have as americans.
Tipster, the construction on Broadway never ends, so the neighbors should used to it. The house on the left underwent a two+ year Van Acker renovation (that just finished up last year). The Traina’s spent two years on their house (also Van Acker). Larry Ellison and Mimi Haas both did some minor renovations.. There was also the original JMK (?) built 2799 Broadway that finished in, what 2003? Now that’s being worked on – again. Never mind the Sperling mess. The whole street is usually in turmoil from all the construction. The good news is the economic slump has made for a pretty peaceful 2009 on the Gold Coast.
If they need more roomies, I’d happily take the study.
so the editor adds “In terms of what this says about the state of the upper-end market, we’ll let you decide.”
i would point to the ytd sales of malin giddings and barbara callan (just to name 2 brokers) as an indicator of state of the upper-end market.
what r the ytd sales, kid char? and what does it say about the upper-end market?
kid char, do you know the ytd sales for giddings and callan? Your comment does make sense. If you don’t know the answer or an approximate answer, any advice on how to discover the answer?
It’s actually quite easy to back into these figures, just go to:
http://www.sfproperties.com and http://www.streetsofsanfrancisco.com and review all properties, generally listed by year. Perform some simple addition and multiplication to derive estimated sales and commissions.
Please do report your findings. 😉
eddy, the websites are inconclusive – what are your figures or conclusions? You really seem to follow this stuff very closely.
Inconclusive how? Malins site does not have all her buyer transactions but clearly states 250M in total 2008.I suspect 2009 is run rate close to half that figure. Barbra is probably at around $40 ytd on track to 80 for the year. Just educated guesses. There are a lot more off market transactions like the raycliff sale that make this year a bit harder to guesstimate. I’d say high end sales are generally off about 20-30% in price, 30-40% volume.
wasn’t raycliff a 2008 sale? how does “$40 ytd on track to 80 for this year” compare to 2008? what are you basing the “off about 20-30% in price” on?
As stated, Just educated guesses.
37 Raycliff was 2008 but my point is that there is a LOT of off market activity that makes it very hard to see what the true #’s look like.
eddy, what is the basis for your “educated guesses”? I mean what is the difference between your expertise(or “educated guesses”) and some joe blow off the street and his “educated guess”?
What is the carrying cost on a place like this? The monthly payment plus property tax plus maintenance minus tax deduction must be a lot higher than the rent, right?
I hope there’s at least 1 or 2 gay boys to keep the place neat…and play good music.
Smart Kids! I wonder if they need another 20-something. Will you guys be posting the party pictures on here too?
ruby, please feel free to ignore me completely.
Moonbeam, the taxes on this place are 110k annually. So if the rent is below 10k/mo as suggested than the taxes are barely covered. Who calculates the opportunity cost of $7.8M these days? /sarcasm. Still this was a good buy IMO and has a lot of upside so even getting property taxes covered is a good move by the investors.
ah, come on, eddy, have a little levity for us less worthies
Speaking of levity, I just submitted a tip to the editor that should provide quite a bit of somewhat related levity to this post. Should make for a good segue of what happens to homes when strangers live together! 😉
This house is a little bit outside of Billionaires Row which is the 2800 block of Broadway. I counted in the house drawing at least 7 toilets which seems like more than enough. The small kitchen space may be a big problem. At least one of the 7 bedrooms is very tiny.
“And their landlord’s only real edict, don’t piss off the neighbors”
Ha! That went out the window the first month they moved in. Can’t wait till the little punks are out of there. 15 months, you say? Should be any day now…
“the rental route is intended as a “short-term” strategy to help with cash flow as permits and plans to redo the home are negotiated and secured.”
What a brilliant strategy. They’ve given the neighbors a choice; approve our plans or we go on renting the place to yahoos.
According to this document:
http://www.sf-planning.org/Modules/ShowDocument.aspx?documentid=8220
on the Planning Department’s web site (scroll down on the left to where it says “Broadway”), the owner is planning to demolish the house and build a new one in its place. Which somewhat contradicts the notion that the tenants are doing work (stripping floors and what not).
To be sure, the tenants in question have not been seen to do work of any kind. Unless loading empty kegs into their van can be considered “work.” They did run naked and screaming down Broadway one night. No kidding. But to be fair, that kind of thing is really more “exertion” than “work.”
Awesome. I wish the owners luck in getting permission.
This place has to be more “historic” than many things in this city that get named “historic.” Has anyone checked if this house has bookshelves or columns that are historically significant?
The developers might be screwed. First they rent the house to a bunch of ex-frat guys who clearly have pissed off the neighbors, and now they want to demolish the house and don’t expect massive neighborhood opposition?? They must not be from SF. All it takes is once angry neighbor to kill a project in this city. I wish them luck. Unless they plan on turning it into a 24 unit BMR building, I seriously doubt planning is going to let this through.
You said it yourself that these blocks are under constant development. I’m sure no one will object and the current house is an eyesore. Better to tear it down and build new so it can be left vacant by the new owners 345 days a year as opposed to occupied by reckless renters 365 days a year.
I wonder what this property would sell for today?
The development has toned down a little bit with only two homes currently under construction; still, the facades or existing envelopes of the houses rarely change dramatically. The project will get done, but I don’t think a full scale demo is going to happen. The house on Raycliff that’s currently undergoing a renovation is sort of a defacto demo without actually tearing down the entire structure. I imagine something similar will happen here. I don’t think they’ll be able to totally raze this house. Has outer Broadway been declared a “historic district?” That would complicate major changes to the facade. I think it’s possible neighbors will object, strenuously. Remember, outer Broadway also falls under the Cow Hollow Association’s aegis and its board (hack cough) is loathe to support these types of project. Think of that POS on Filbert the owner wanted to demo in order to build a modern, view centric home. It had been stalled for close to seven years thanks to the CHA. Something similar could very well happen here unless the developer has major pull with the city.
Agreed. The pdf doc linked above seemed to not show any reason that a demo would be objected. But if I were a resident I wouldn’t approve until I saw the final design for a new property. Anyone have an update on the Normandy situation?
UPDATE: Designs For The $8 Million “Teardown” On Billionaires Row.