According to the latest One Rincon Hill Newsletter (Spring 2008), construction on the first tower should be complete by the end of September (with common areas complete by late summer) and seventy-two (72) sixteen-foot trees will be planted up the driveway to the entrance once Caltrans “finishes work on the First St. on-ramp later this summer” (which will be a welcome addition of green).
Also noted, the groundbreaking ceremony for the second tower will now “be scheduled soon after the selection of the general contractor this summer” which suggests that the construction scheduled for Phase II has slipped another couple of months (despite securing financing).
Closings and (re)sales update coming soon.
∙ One Rincon Hill Newsletter: Spring 2008 [onerinconhill.com]
∙ The Straight Scoop On What’s Up With One Rincon Hill’s Tower Two [SocketSite]
∙ One Rincon Secures Financing For Tower Two (But Still Seeks Builder) [SocketSite]
I find the fact that the construction date is a moving target to be concerning.
no kidding.
you dont have “secured financing” and then not start the work.
I wonder if it’s related to the closing situation for tower 1. often a builder will have to show a certain amount of closings/contracts before being allowed to build. so they may have to wait a while to prove that ORH tower 1 will close ok before being allowed to build ORH tower 2.
another possibility is that the ORH folk are trying to get the builders to drop costs, since the market isn’t doing as great. so ORH may be negotiating with builders (and maybe suppliers) in order to bring construction costs down.
also: perhaps they believe the housing downturn will be short, and will recover next year. if that is the case, then it would make sense to hold off so that their product doesn’t come on line too fast. this strategy fails if the downturn is multiple years
One Rincon should call it a day and quit while they are ahead. Forget building the 2nd tower. Finishing the first is already a huge problem and why would they think they can sell the 2nd tower with all the cancelations on tower 1? People are trying to unload units ranging from $700k to $2 million. There’s much not listed on craigslist.
Plus, who really trust this developer?
Haven’t the inclusionary housing rules changed significantly during the interim between tower 1 and tower 2? Don’t they have to set aside an additional 10% of the units for BMR this time around?
Ex-SFer,
While I think your first point will definitely be a factor, my gut instinct tells me that point #2 may be the key issue. As mentioned on Socketsite, with less ongoing contruction over the past 2 years, contractors are more willing to lower their charges to secure business than in previous years. Accordingly, if one can avail of the overall softness in the R.E. market by reducing the cost of inputs, that makes good sense. Moreover, with markets more likely to look promising in 2009 rather than this year, there may be even less urgency to begin construction straight away.
As an owner in tower I my primary concern is having Bovis complete the common areas first [pool and courtyard area] and getting some trees in place before moving onto the next tower.
best photo of 1RH … evah !
There may be a few things going on here. According to one of the previous articles they have secured construction financing, but that financing may still be contingent upon a certain number of pre sales. My opinion is that given the current market they will likely have to offer the units in tower 2 at prices which are below those in tower 1. If the developer begins to market the units in tower 2 at a discount to the units in tower 1, that could have a significant negative impact on his ability to close units in tower 1. Depending on the size of the discount between the towers, buyers of tower 1 may walk on deposits.
So, I think the developer may be holding off on construction and presales of tower 2, until the sales in tower 1 are substantially closed.
I agree Milkshake. There would be fewer complaints if this side faced the city.
The developers are not dumb. In a declining market there’s no way they can market tower 2 at a higher price than tower 1. So few buyer can even qualify for jumbo loans so where’s the demand going to come from?
The developer IS smart to delay and close out tower 1 before starting construction and opening sales. By then it’ll be too late for tower 1 residences to complain.
I’d much rather buy in tower 2 if I had a choice. Away from that noisy onramp and with unobstructed eastern views, and hopefully at lower prices…
Building the 2nd may bring down the value of the first…Reminds me of having the band booked for 2 shows when the first doesn’t sell out – makes for a bad encore performance.
Recent ORH – Not sure why you would think the mkt would be better in 2009 than 2008. Possibly in the Central Valley, where prices are crashing (so inventory can move) and may well hit bottom by that time. But anyone who truly believes the “SF is different” line is expecting a “soft landing” here, which basically means close to zero nominal price appreciation for years (negative real price appreciation…we’re definitely already seeing that).
In that kind of environment, a developer wants to sell sooner rather than later. Why tie up money in an asset that isn’t even keeping pace with inflation when you could instead sell it now and invest in something earning real interest?
As a developer, the only way it makes sense to hold off selling until 2009 is if (a) you think SF is crashing horribly right now and will start rebounding quickly 12 months from now (hard to imagine) or (b) you think that property values are still increasing a fairly torrid pace of 5-10% per year (even fluj doesn’t think this!).
Missionbayres,
Sounds like ORH developers are doing pretty much what the Infinity is doing – close out Tower I before starting the sales process on Tower II. Problem is that the Infinity has had a far harder time selling out Tower I, with anywhere from 20%-40% of inventory left.
So, using your analogy about ORH, won’t the Infinity have to lower prices for Tower II, given that “few buyer can even qualify for jumbo loans so where’s the demand going to come from?” Let’s face it, the $1300 per sq ft they got for N.E. views in Tower I won’t happen for Tower II … don’t you agree?
Recent ORH buyer,
Yes I do agree.
Both Infinity II and One Rincon II will most likely have to price lower than the first towers to attract buyers.
Buyers are not stupid, this is a declining market. And we should see even softer prices in 2009. So folks that bought in the first towers should be nervous, very nervous.
Personally, I’m lining up to buy in the second towers. I expect much lower prices…
Infin 2 should definitely have higher prices since the unubstructed views will be so much better to the E and SE.
Many units in Tower 1 already have blocked views by Tower 2. And let’s not forget that two towers will be build across the street to the west, blocking Tower 1’s view west….and once the temporary terminal is closed, a tower will be built to the north.
I believe the Infinity is going to protect whatever pricing pressure exists on tower 2 sales by having the right of first refusal on tower 1 resales (not sure if it’s for 1 year or 2).
In any case, in the long run I think they were smarter to just build tower 2 right away rather than delaying it. They may have to carry it for a while, but they’re big enough to do that.
Anyone notice that the cheerleaders have really started keeping quiet? 8 months ago, half the posts to this thread would have been people preaching how tower II would boast higher prices than I. Seems like now the vast majority has come to realize that’s not realistic.
I had an offer in at the Infinity in Oct. that I withdrew after they tried to counter, so now I’m sidelining it. It feels good to see I made the right choice and saved myself a lot of $. But at the same time, I feel a little bad for those that didn’t.
Tishman’s certainly big enough and has the ability to weather this storm. I have a feeling they will drag this along until the economy improves no matter how slow sales are. So far, they’ve done that to protect Infinity 1 buyers.
One Rincon on the other hand doesn’t seem to have the financial stamina to ride this out. I see much lower pricing when they start selling. I do feel sorry for tower 1 buyers though. But I’m licking my chops in hopes of getting a NE corner unit in either tower 2’s. Should be fun to see this unfold…
Sounds like ORH developers are doing pretty much what the Infinity is doing – close out Tower I before starting the sales process on Tower II. Problem is that the Infinity has had a far harder time selling out Tower I, with anywhere from 20%-40% of inventory left.
Uh, yeah, except that the Infinity tower 2 is well underway and ORH is scrambling to find someone to build tower 2 and figure out a way to pay for it. Other than that, it’s the same.
“ORH is scrambling to find someone to build tower 2 and figure out a way to pay for it.”
While the builder has yet to be selected, I guess you had a hard time understanding the portion about financing … which has been secured, yet you hear the same mis-information over and over again.
https://socketsite.com/archives/2008/04/one_rincon_is_preapproved_for_tower_two_but_still_seeks_1.html
Let’s not forget that they could always just rent the units out (which is what half the buyers were planning on anyway). Most “investors” can’t make it cash flow at current prices, but the developer may come close depending on their costs.
In either case, we’re looking at two positives for San Francisco as a whole: more housing, and lower housing prices.
My bad, looks like they did get the funding. So now they’re just scrambling to finish the first tower and find a builder so they can break ground in May…I mean summer…I mean….
another-anon, what’s your point?
Why do they need to scramble to break ground?
As this market condition, why would anyone want to finish soon? The best way is to time it so it finishes when the market goes into the next peak (5 years from now?). So I would try to postpone the start to early 2009, and maybe finish 2012/2013.
20 – 40% of the Infinity left? Curious where you get your wide range of estimates there. Just made them up? OK.
“20 – 40% of the Infinity left? Curious where you get your wide range of estimates there. Just made them up?”
Recent ORH buyer likes to make things up. He thinks I work for Infinity and I’ll be the first to admit prices at One Rincon and Infinity will probably decline over the next 2 years. The better deals to be had will be the 2nd towers in 2009. Unfortunately, many tower I buyers will be underwater…
JohnK – I honestly don’t know what the exact inventory is at the Infinity, but have heard estimates within the broad range that I stated. If you have verifiable numbers, please share them.
Missionbayres – curious why you had nothing to say about anon’s comment “Infin 2 should definitely have higher prices since the unubstructed views will be so much better to the E and SE” given your contrary opinion.
I guess Infinity II will have great East and SE views, perhaps from above the 10th floor … much like the unobstructed ones ORH Tower I has for almost all units facing that direction. Hopefully they will change the white ‘hospital’ kitchens from Tower I.
I suspect the sales at both towers are in a bit of a holding pattern right now. It may be a bit follish to jump in an grab the scrapps that remain when a new tower at the Infinity will come on line here within a year.
Also, at the Infinity, I suspect they will upgrade the units to equate to the same pricing before they try to move them at a lower price. Tishman is a company that understands the need to balance its immediate sales needs with its long term reputation.
FYI- I just went to the Infinity a couple of days ago and they are 90% sold.
Interesting.
For the first time, I’m seeing ads in CL where One Rincon contract holders are willing to sell at below contract price. So my assertion that prices are declining could be accurate or else these sellers would’ve found buyers. Instead they are now lowering prices…
http://sfbay.craigslist.org/sfc/rfs/663988015.html
http://sfbay.craigslist.org/sfc/rfs/663013033.html
http://sfbay.craigslist.org/sfc/rfs/663986399.html
http://sfbay.craigslist.org/sfc/rfs/663517724.html
[Editor’s Note: For the first time? (A One-Bedroom Resale Officially Joins The Twos At One Rincon Hill)]
I went to Infinity 3 weeks ago wanting to make an offer on one of their treetops and their inventory sheet was sparse. I’d say 90 percent is pretty accurate.
And FYI they don’t really budge on their pricing. You may get 6 months hoa or something but they are still pretty firm on pricing.
Ok, here’s my take that has a low opinion/fact ratio.
Tishman Speyer has not seemed to lower their price point on quality units. Either they have no clue what’s happening to the RE market (doubt) or they have really deep pockets and indeed, can weather this storm (or I can’t negotiate worth sh$#).
Regarding tower II. One simply cannot generalize the prices. The units with the better views than tower I will be more expensive and will sell. The units with comparable views will be the same price or 5-10% less and will sell. The units with obstructed views will be less expensive and won’t sell.
One Rincon contract holders will get increasing desparate the closer they get to their closing date.
My take is they will slowly continue to lower prices until they reach their 3 percent threshold. If no offers come under three percent, they will walk away.
I guessing most won’t get offers and could result in a flood of cancellations.
Don’t the days of signature cocktails and complimentary logo umbrellas seem like decades ago now?
I think Nickfinity makes a sound point. A great view is a great view and units in Infinity II that can offer great views will be sold at a higher price than comparable units in Infinity I. Believe me there are still a great number of people making a great deal of money who can afford special properties with unique features (like an unobstructed view of the bay) regardless of market conditions. Look at condo sales in New York City.
Can’t anybody comment on the change in the BMR environment and how that effects these projects?
although I agree with the idea that units with a view will sell faster and for higher prices than units without a view, I’m still not sure that units with view in Tower II will sell for more than units in Tower I.
they might, or they might not. the landscape has changed… and as more and more luxury skyrises come on line the landscape will change even more.
I’m surprised that no one brought up the 100 closings and 80 move-ins from the newsletter. These are decent numbers in the current environment.
that’s because its good news r.
Viewlover & R,
You two are both right – highlighting good news about One Rincon simply isn’t in fashion on SS. However, when One Rincon does end up closing 98%+ of units by late summer [even though there will be further ‘dropouts’] the silence from the naysayers and other twits will be deafening. By then, it will be time to pick on another condo building.
Can someone please tell me what’s the allure of living in a “luxury” tower that fronts directly onto a major highway. Over $1000/sqm for carcinogens galore each and every time you open your windows. That’s luxury.
Diapers,
Welcome to urban living. Truth be told, if you want to live in a larger urban area, superior air quality would not be one of the reasons to do so. In reality the carcinogen levels in the air won’t vary dramatically for several blocks, so whether you live at the Brannan or at the Infinity, you are pretty much breathing the same stuff as One Rincon dwellers, perhaps more on certain days, depending on wind directions. Similar analogies apply for Mission Bay where the 280 offramp isn’t likely to be much more forgiving to everything from the Arterra to 88 King Street, and most everything in between. By the same token, those within blocks on Van Ness and Lombard Street [101 through the city] have the same issue. It may appear more extreme because one can see the cars closer up at One Rincon, but the actual effect is pretty similar for the nearby ‘neighborhood’.
An anecdote that may be of interest. I have lived at the Portside [a pretty cool building] which happens to be situated under the Bay Bridge, pretty close to the Infinity. When living there my balcony would accumulate soot/black particles that were readily visible just two weeks after cleaning it. I will say that the soot particles aren’t much of an issue at One Rincon, even on my lower floor. While its not scientific proof, in my experience units ‘below’ the bridge get more of the soot than those ‘above’ it.
Why pay $1000 per sq. foot to live at One Rincon. For me, the units are well built with appealing finishes, and the views [including incredible sunrises] from almost all of the units facing east and south are amazing. Anon thinks the E and SE views at Infinity’s second Tower will price higher than the first Tower, so you could always pay $1400+ per sq. ft to live there.
I’m surprised that no one brought up the 100 closings and 80 move-ins from the newsletter. These are decent numbers in the current environment.
I’m not sure that people knew that.
so 100 closed out of about 371 units… they’re over a quarter of the way there…
so people should all be moved in by later fall? or will they accelorate the moving in?