While new residents have started making the move, Arterra’s official “Grand Opening” is scheduled for this weekend (September 6/7). And according to a plugged-in tipster, both Arterra and The Hayes are currently hovering around 50% in contract or closed.
If our tipster and past counts are correct, that represents a net loss of contracts over the past eight months at The Hayes, and well below the developer’s expectation of 75% sold by the official opening at Arterra.
∙ Arterra (300 Berry) Update: Sales Office Onsite And Models Unveiling [SocketSite]
∙ The Hayes (55 Page) Strips Off (And Reveals) A Little Bit More [SocketSite 1/08]
∙ Arterra (300 Berry) Update: 40% Pre-Sold? [SocketSite 10/07]
Wait, so these buildings aren’t even half-sold at move-in?
Is this normal? What happens to the HOA fees? Does the developer front the fees for the unsold units? Is there a set amount of time after which the developer is free of that obligtion or can readjust the fees so the sold units bear a higher cost?
The developer pays HOA fees on the unsold inventory. I don’t know anything about a time limit and would assume that whoever holds the title of the unit is on the line for the HOA.
This is an additional motivation for the developer to unload unsold units … or not build a second tower if they think it will not sell fast.
Thanks, I always wondered about this. So, in some ways, it’s probably pretty nice for Hayes residents who have 1/2 as much demand for property facilities right now.
Although that’s seriously trying to look at the glass as half full! (pun intended)
Anybody know if either of these properties are upping incentives?
I looked at the Hayes a few months ago and they were still on the pricey side with limited incentives.
Interesting, we visited the Arterra in May and were given the 50% sold figure then too by their sales reps.
Carrying costs must be fairly high with the developer covering 50% of the HOA. Got to be even more painful at the Infinity with the developer carrying about 40% of the exisitng tower and 100% of the yet unsold one. Ouch!
Tishman (devloper of The Infinity) has plenty of cash and has no problem paying dues on unsolds. I don’t know if the same can be said for Intracorp. They bought The Hayes fully entitled and paid a premium for it. 50% sold/closed with 2 years of sales under their belt ain’t so good…
I’ve been looking for a while and had always avoided the South Beach developments based mainly on what I have read here. Been to the Hayes and hated the cheap looking finishes. Decided this weekend to check out Arterra based upon many positive comments here. Just driving into that neighborhood on Saturday morning, I encountered several traffic and navigation issues and immediately had a hard time equating the feel of that neighborhood with SF living at all. With more of these developments looking like turkeys, I say this whole area is starting to look like every other overbuilt condo market in America. San Diego…South Florida…Phoenix…Vegas…. I’d sure like to hear the bullish case for this neighborhood because I don’t see how one avoids calling this a bust in progress.
I disagree mktwatcher. Sure it’s a condo area but I think the area is shaping up nicely. You have to remember all the development going on in South Mission Bay. As those buildings are completed I think you will see a vibrant neighborhood come to life.
Mission Bay already has decent retail (still needs some work) and some quality restaurants. You have access to better then average public transportation, weather and culture (ballparks, museums).
I agree this neighborhood does not reflect a “typical SF area” but that is because its brand new and the “typical SF area” was developed 50-75 years ago. Its like comparing the empire state building with a new skyscraper in Dubai or Hong Kong.
although I think that this area is overpriced, there are some reasons for hope for the neighborhood for the future
1) if one works downtown, it is quite a close commute with good transportation options, and one can even walk depending on where you are and how strong your legs are.
2) some of the places also have good views of the water at least for now.
3)the weather is warm and sunny
4) some people like “new”. these are “new” options… not found often in other parts of the city.
sure, it’s generica to the max, and looks just like everywhere else. but a lot of people like that.
obviously, as I said before you’re taking a huge gamble on this area, as it may be over a decade until the neighborhood is “established”.
the problem for me is that this area is priced as though it is established, but it is not.
but that’s the problem with the RE mania everywhere. There are overpriced condos in bad neighborhoods all over the country.
@ mktwatcher: are you referring to Soma? Because I’m definitely bullish on the neighborhood long-term. Just not at today’s condo prices. But I do think the heart of the city is shifting south of Market, albeit slowly (think decades).
My first job out of school was with Fritz Companies, on 3rd and Mission. I used to walk to 2nd or even 1st to get lunch. And I made a number of trips over the area recently.
I would guess that in the near future, 5 yrs from now, it should be price at 20%-30% discount to Pac, but it is not. So, I do anticipate some price declines in the next yr or so.
The only people that made money out of this area are the developers. Those who bought new from developers did not make any money, at least that is I was told by a ex co-worker who bought 3-4 yrs, tried to sell 15 months ago and could not.
I anticipate big price drops, much bigger than other districts, primarily because:
1. It will never by typical SF, like someone already mentioned;
2. whenever you want to unload, you are competing with 10 other units that are exactly the same.
I agree with 11223. My girlfriend just sold her place near the ballpark, made some money, but there is a lot of inventory in the South Beach area. The folks in the Beacon are hurting – she fortunately bought somewhere else. Now she lives with me. She is a neat freak, I’m just freaked out, next stop – a $2.5 million fixer in Dist. 7/8 – joy.
I generally agree with the comments above, but keep in mind there are many of us who don’t want to live in “typical SF.” Why would I pay a premium to live in some clapboard wooden hovel with a bad floorplan, surrounded by NIMBY neighbors? Because it’s close to the frat bars on Union or has a view of a prison?
I’ll take the new San Francisco any day, banal as the design may be. There are certain features I care about more than architectural merit or yuppy coffee shops. Like insulation. 21st century wiring. And washer/dryer in the unit. Call me crazy.
mktwatcher, I’d say Mission Bay is definitely not South Beach. MB is ok but I much prefer SB, for example a building like The Brannan. Very nice facilities and water views that will forever be unobstructed. Watermark has nice facilities and good units too.
Good points about the neighborhood: Walk to work and union square, some of the best weather in SF, new(ish) construction…My wife and I have lived in many neighborhoods in SF previously (north beach, russian hill, sunset, and haight) and would not live elsewhere in the city.
Bad points….not as many restaurants and cafes (yet) as an established neighborhood…occasional hordes of redneck giants fans
Count us in as people putting our money where our mouth is. About six months, we were walking around downtown one evening and noticed that the area was really coming alive. A real urban lifestyle in SF! Who would have thought? I’ve always envied the lifestyle my sister has in NYC, and I was excited about experiencing something like that here. Of course, SF is no NYC, but downtown is not like the downtown of ten years ago when I first moved here.
So we took the plunge. We just moved from a house in Bernal Heights to a condo in SOMA. Our fallback was a house in Noe and I’m so glad we opted for SOMA. Our lifestyle has changed 180 degrees for the better. We are walking everywhere – the grocery store, cleaners and even to work. We walk to Union Square, SFMOMA and the Ferry Building on weekends. Jogging and biking are right there along the Embarcadero. Transportation access is unmatched. The restaurant selection is good and getting better.
We gave serious thought to the financial impact of moving to SOMA and a condo. It is manageable and we are prepared to ride out the ups and downs of the market, even if it is more down than up for the foreseeable future. For us, everything I mentioned above also fit into the equation, and it was an easy decision.
We are very optimistic about SOMA going forward. All the projects are bringing in lots of people into the neighborhood, which is creating critical mass. There is also a very healthy business community with the Web 2.0 companies. I do think there is a lot of rather generic construction out there, so we chose our building and unit with care. I won’t specify which building. Of course, I expect there will no shortage of issues with the city, this being SF and all. But we have voted and are very happy with our choice. And I think our new neighbors are happy with theirs as well. My two cents.
Not sure where you’re getting the 50% figure for the Hayes. They’ve closed almost 70 homes out of 111. The % sold is close to 70%.
Michael,
I won’t ask you which one you purchased, but if you like the area so much, can you name a couple of buildings that you like the best??
Personally, i would not consider the arterra because i think the neighborhood is 10 yrs away from what I would consider a full fledged neighborhood. I think South beach is Ok and may be there in 5 yrs, but Mission Bay is really terrible in terms of design and look. its hard to believe this city had the opportunity to build this area from scratch and decided to turn it into san diego.
As for “the Hayes,” I would personally consider this building, and think this neighborhood may clean up in next 3-4 yrs. However the 2dr 2ba high floor units will need to be priced in the $600s
I agree with anon 418PM:
Mission Bay is a whole different animal than South Beach. Stroll down to 2nd street and it’s the gateway to the financial district and the ballpark. There’s shopping, galleries, restaurants and cafes. Unlike Berry Street, South Beach has ample of parking and there is no wind tunnel plus no smell from the creek. Delancey Street is the nicest street in SOMA. The good thing about South Beach is that it is built out. The Gallo Building is now commercial instead of condos and the only other space where they can build is the lot next to 88 Townsend. Plus the buildings in South Beach are somewhat unique instead of the “cookie cutter” exterior lining Berry. The Brannan is still one of the top buildings. The lofts on Bryant Street always sell well. Not to mention Oriental Warehouse, 200 Brannan, Watermark, 500 Delancey, 88 Townsend and the Clocktower, it all adds to the character of the neighborhood.
Even though Mission Bay is only a few blocks away from S. Beach there’s a big difference.
The plus side of Mission Bay is the new dog park and basketball courts but South Beach is steps from the water for a beautiful jog.
I’d put my chips on South Beach before any other SOMA areas.
I wish the new building in and around Mission Bay would by-pass the planning department and that the architects true vision could be built. A neighborhood like that would be incredible in my opinion. With as much money as gets put into building the current boxes, I’m sure there would be some incredible living spaces and the neighborhood would be unique.
I’m all in for MB. Just check out the plans for the whole area. 10 years ?! No way, just think back to what berry st looked like just two years ago. In 6-8 years this place will be thriving, and it might even have its very own frat bar.
I am a new resident here, and I think its great. For someone coming from the suburbs, having a washer/dryer inside the unit is huge. Yes the area is “dead” at night, but I’ve gotten to other night spots in the city relatively easily and quickly (relative meaning I used to drive an hour to get to SF, now I just drive 10 min or take the Muni for 20). The only thing I wish they had down here was some cheap food…but thats wishful thinking
To the above posters who are grouping SOMA, South Beach, and Mission Bay together: With all due respect, you don’t know this end of SF at all or have been cloistered away in the fog belt somewhere.
South Beach is hardly an undeveloped neighborhood, unlike Mission Bay. I have lived in SB for over 10 years and have watched it grow from a weekend ghost town to a bustling, congested neighborhood. SOMA is still very much an industrial neighborhood with pockets of development between clubs, auto repair shops, and small restaurants. Mission Bay is still very much in its infancy and will need another upturn to realize its full potential.
All of which translates into the following: If you are looking for long-term price appreciation and don’t mid a lack of immediate immenities within walking distance, then Mission Bay is a good place if you play your cards right; South Beach has been and still is one of the most exclusive neighborhoods due to weather, views, and other quality of life elements that most “established” (old) neighborhoods in SF cannot come close to for the price. Just try to buy in the Marina or Pac Heights. SOMA will always have pockets of good and bad being stuck in between the old and the “up-and-coming” and being a major transportation artery along most of the streets there (either to/from the bridge or to/from downtown). SOMA has a long way to go, but it depends on what you like.
Some of the folks above have it right and the past several years more than prove the point considering what South Beach used to be such a short time ago. The others here seem to either not know much about SF history, are confused about location, or are just a bunch of “haters” that despise new development and the possibility of a new neighborhood outside of the old places like the Marina, Pac Heights, Nob Hill, etc. I’ve seen a lot of posters who don’t really seem to know much about SF or haven’t been here very long. SF is full of micro-markets that will continue to thrive even in a down cycle and South Beach is one of those markets in spite of the new developments, as are the Marina and Pac Heights, but unless you have $2.5MM to spend, you can’t really compare the latter to the former.
JohnK:
although I agree with a lot of your points and I agree that many people confuse SB with SOMA, I would still have an extremely hard time comparing Pac Heights, Marina, or Nob Hill with South Beach. I also would not call SB “exclusive”. That might be just me.
case in point: people do confuse SB with SOMA and even Mission Bay. Nobody confuses Pac Heights with Richmond or with Western Addition as example. Everybody knows the cutuff is California… likewise, nobody confuses Nob Hill with the tenderloin. Even borderline areas have been renamed “Tendernob”.
The reason: exclusivity.
SB hasn’t made it yet. It might… like I listed above, there are reasons why SB, SOMA, and MB can all become neighborhoods in their own right…
Also: I call SB transitional because it is still unclear what relationship it will have to the city itself once the surrounding neighborhoods come into their own. Sure, right now there isn’t a lot of traffic through there (cutoff because of the Highway… no reason to go through there unless you’re living down there or going to a game). However, what about if/when Mission Bay happens, and people start commuting through SB to get to downtown?
or the East Bay folk may need to commute to Mission Bay, and it may happen by them going partly through SB.
2nd, 3rd, Bryant, Townsend, and King all have potential to become quite the thoroughfares IMO (for people to get to/from Mission Bay/East Bay.
SB hasn’t made it yet. But it’s priced as though it has IMO.
I agree with the posters that there are some major differences between SOMA, South Beach and Mission Bay. We gravitated towards the 2nd St. corridor which is already a pretty decent walking street with an array of retail and restaurants. The historic warehouses add the character that we were looking for.
So our preference was definitely in the 2nd St./South Park/South Beach area. There are some nice conversions and new construction. One building a little out of the area that we liked was the Watermark. The views and facilities are very nice. Downsides for us were the high HOAs and the lack of retail/places to eat in the surrounding blocks.
My point above about South Beach and Mission Bay actually seems more poinant now. It really took South Beach 10 years to go from a developing to full functional and thriving neighborhood. I alsp wouldn’t call it exclusive yet as there are not enough highly groomed poodles and there are starting to be a lot of price drops in the area, unlike Pac Hts.
Mission Bay is where South Beach was 10 yrs ago. I think it will be 8-10 yrs before it is thriving and a highly desirable place to be. if you are on that time horizon, then power to you. If not, be prepared to deal with a ton of construction without a lot of infrastructure
Yup, Mission Bay definately has some time ahead of it before it’s all put together. But I don’t think anyone has to commit to being there for 8 to 10 years if they buy near there. Granted, perhaps all the amenities won’t be there while you’re living there so it’s important to get a price that reflects that. But isn’t there a little value added everytime a new development in Mission Bay is successfully completed? Or everytime a new restaurant or retail space gets occupied. Because if you need to sell prior to the 8 to 10 year timeline then the buyer of your property would be looking at a shorter timeline ahead of them. So that should add some value to asset you bought right? Does that hold water with the experts out there or am I full of crap? And be gentle, because I bought at Esprit Park, south of Mission Bay, and I don’t know if I can hang on to any location for 10 years.
Boo:
it all depends on what happens in the next 8-10 years. At this point it is all conjecture as to what these neighborhoods will be. most of us THINK that they will be better in 2018 than they are in 2008, but it is not assured.
For instance, I still have qualms about the style of a lot of what is going up in those 3 neighborhoods. not the exteriors, but the fact that many of the places are 1 BR and lofts. Lofts have become the “in” thing in the mid 2000’s for whatever reason. but many people wonder about the practicality of living in essentially one big room. (same problem with the “great room” that you see in larger suburban developments).
what will the trend be in 2018? will energy costs mean that small in-city near-downtown developments are in favor? if so, then these areas should do fantastically. will lofts be thought of as glorified dorm rooms? if so, some of the places will struggle.
for instance: think of how many people you know who have bought a 1950’s home and had to tear down walls to open the house up… and how little closet space there was in the old 1900’s homes. people are sometimes willing to buy and do huge renovations if they think the house has “character”.
if it doesn’t have character though, then the house either goes for a huge discount OR it is torn down and redone.
this to me is the difference between “established” and “transitional”. you know what the neighborhood will be like 5-10-20 years from when you buy in an established neighborhood (within reason).
but the biggest danger is that a neighborhood will be transitional on the way up, and then a downturn hits and it takes the neighborhood right back down.
and this is why a transitional neighborhood should come at a discount to an established neighborhood. In my opinion, much of what I’ve seen in SF transitional neighborhoods doesn’t come at a discount, instead they’re priced as though they’re established.
don’t worry about your home. why not just use it as your home?
Here we go…another blog turning into a Soma/SB/MB versus the “traditional” neighborhoods (ie. Marina) discussion. Not everyone has the same tastes or even the same long-term vision.
Granted there is alot more development in Soma/SB/MB with alot more inventory…on the flip side there is a HUGE group of buyers who want to live in the city but need easier access to their higher paying jobs on the peninsula. On top of that, there are people who prefer what comes with newer developments (ie. bigger bathrooms, kitchens, closets etc.); those who prefer the better weather in SB/Soma/MB; those who prefer being able to park their cars; those who prefer community amenities like gyms, pools, etc.
Sure those things aren’t for everything. But those who don’t value those things who also don’t see how others might value those things are being completely close-minded.
I’ve lived in SB/MB for seven years now and don’t feel like I’ve sacrificed ANYTHING by purchasing there. I’ve still had ez access to the “traditional” neighborhoods, had easier access to my job on the peninsula, all while enjoying a nicer place to call home than in the “traditional” neighborhoods (including the awesome weather). Despite preferring SB/MB, I certainly understand the positives/negatives about each SF neighborhood (it’s those differences that make SF great). What I don’t understand are those people who are so close-minded that they only see value in their owns views.
On that note, I don’t know how many people I know or have met over the years who at one time in the past bashed SB/MB and who now LIVE THERE and love it.
Interesting discussion with some good points being made. Just curious as to what the ‘official’ boundaries of Souht Beach are defined as. While I think the North/South limits are probably Market and King Street, would the West/East limits be 3rd, 4th or 5th Street to the Embarcadero?
The following website appears to classify South Beach by the 94105 zip code, and does indicate some interesting differences in ‘real time’ condo statistics between Mission Bay and South Beach.
http://www.sfcondosales.com/condocount#SF%20stats
I confess that despite being in SF for ten years, I did not know the Misson Bay/SoBeach boundaries at all nor these neighborhoods very well. Mea Culpa.
@ex SF-er
Regarding your point about lofts: I know at Esprit Park (not really MB) the first things to get in contract in the South Court were the 1/1.5 traditional floor plans, not the lofts. The lofts took a bit more time to get in contract. I think lofts are tough because it’s hard to justify the price when even though you’re getting 1200sf it’s still just a 1 bedroom esentially. When you get to that price range I think it’s common for people to want the utility of 2 bedrooms.
But why do you think it’s bad to have 1 bedrooms in the unit mix? Or is it just that it’s too many 1 bedrooms?
But why do you think it’s bad to have 1 bedrooms in the unit mix? Or is it just that it’s too many 1 bedrooms?
the latter: there are too many 1 Bedrooms. (IMO of course)
If you look at where the real strength in the SF market has been, it’s the 3BR/2Bath market. That is what people really want. But also what they cannot afford. (very limited quantity). even in a down market people seem willing to go into a bidding war for the right 3BR/2Ba place.
already the units around town that are suffering are studios and 1 BRs. there are some struggling 2Brs with 1 Bath as well, but less…
I feel that SF really had an opportunity to zone differently and build what people are DESPERATE for: 2-3-4 BR places with 1-2-3 Baths. but sadlly it didn’t turn out that way.
so I think that this mix could end up really hurting SB if it continues with 1 and 2 BR units and lofts… the reason: only a limited demographic wants this (singles and DINKS and maybe some of the retired folk). it’s better for property values if your unit is desireable to more of the populace.
the big danger is that eventually SB/MB/SOMA is seen as a “starter” hood where you go until you can “move up” to a place in the other neighborhoods. because let’s face it… how many of us REALLY dream about a 1BR place? How many of us dream about raising or families in a loft? it’s better to have a small 3Br/2Ba place than a large 1Br or lofted space.. at least for long term appreciation ALL IN MY OPINION.
as a corollary: how long can SF survive as a city that only has housing for singles and DINKs?
Here, here, ex SF-er. The obvious reason why the developers wanted to build 1 BRs and studios is that you make a lot more money on the same space IF you can sell them. The city really dropped the ball in approving such plans. There really isn’t much of a voice for the demographic seeking 3-BR homes at the Planning Commission other than the Daly crowd taking effective bribes to get a few BMRs in the mix. And now it looks like the developers have perhaps shot themselves in the foot by not being able to sell exactly what they pushed to be able to build.
Here we go…another blog turning into a Soma/SB/MB versus the “traditional” neighborhoods (ie. Marina) discussion. Not everyone has the same tastes or even the same long-term vision.
not sure if this is directed at me, but I already posted the huge benefits of these newer neighborhoods. (at 319pm on 9/3/08) and I didn’t start the comparison… it was JohnQ who compared SB to the traditional ‘hoods.
again: my only concern with these newer neighborhoods is only that they haven’t stood the test of time. yet. who knows, in 10 years they may be awesome. or they may fall and crash.
on a side note, if you’ve read my posts on SS over time, you’ll see I have had the same question about Noe. Noe to any long-timer has always been a nice working class/family neighborhood. only recently (perhaps a bit more than 10 years or so) has it been “prime”. I still choke every time I hear it said in the same sentence as Pac Heights. That isn’t to say Noe isn’t great. it is… it’s that it’s a newish appointee to the “luxury” SF market.
since it’s a “new entry” I wonder if it will remain posh if we go through a downturn. there is no question in my mind that Seacliff and Cow Hollow and Pac Heights (N of California) will always be primo neighborhoods, through up market or down. But Noe hasn’t really weathered a huge down market yet (weathered 2001 ok though)… so I wonder what’ll happen as the google $$$ dry up… will it revert to it’s more humble (but still great) roots? or will it hold its prime designation?
It reminds me somewhat of Potrero Hill. I remember when SF went through the post downturn boom in the mid to late 1990’s. a lot of neighborhoods were set to be the “next big thing”. At the time a lot of activity was happening in Potrero Hill and Mission and also Noe and Bernal as well as other places. I had a lot of friends move over to Potrero Hill as it was destined to be the next “posh” spot. A lot of cool restaurants and everything moved in there. it was great. But it never really materialized… and it really fizzled after 2001. Don’t get me wrong, Potrero Hill is 1000x better than it was and I like that ‘hood… but it didn’t live up to the hype, and instead it was Noe that ended up being the “next best thing”… but a lot of people thought that Potrero Hill was going to be what Noe became.
so to me, transitional or newer doesn’t mean bad per se, it means that you have less information about it. that lack of information usually translates to a lower price. will SB/MB/SOMA be the next Noe? or the next Potrero Hill? Regardless, it’ll be way nicer than it’s EVER been before.
with new you get a lot of hype and pizazz and “newness” which is great… but you just never know how it’ll weather. And that’s not a bad thing IMO.
agree with Ex-SFer.
MB is not a bad place. Its just not developed yet, there is a lot of construction to “live through” and who knows how the neighborhood will turn out. Its no worse than traditional neighborhoods, just riskier. i like the sunshine, but the units tend to be smaller, more cookie cutter and attract a lot of corporate rentals (lack of community)
Follow the jobs and you’ll see whether or not there will be any price appreciation. Mission Bay is now creating real biotech jobs. It was awfully nice of Californians to fund CIRM, then base it in SF! Whether lucky or skillful it was on of the Mayor’s best moments. On top of that we have UC and collaborative efforts with co.’s like Pfizer – this is starting to pay off as biotech is moving to mission bay and they need workers of all stripes. Follow employment in real estate markets- SF has been something of an anomaly because of trustafarians, empty nesters but employment is key.
employment is key, except for only the top brass from these companies will be able to afford to live in Mission Bay…maybe 3-5 per companuy