From the San Francisco Business Times last week with regard to Avalon at Mission Bay III:
…AvalonBay’s third Mission Bay building, which opened less than a month ago and held a grand opening party June 18, is 36 percent leased and 25 percent occupied, according to Meg Spriggs, who oversees Bay Area development for AvalonBay.
From a plugged-in reader yesterday:
With regards to [Avalon at Mission Bay III], they have something like 30 tenants and 80 units [on line] at the moment. Each month on the 15th another 20-30 units are [made available for occupancy].
So these stats they put out are meaningless. Their current incentive is first month free and $100 off the base rental price per month. But they also raised parking to $150/spot up from $100.
We’ll call that 12 percent leased for the 260 units to be at Avalon at Mission Bay III.
∙ Strata And Avalon III Riding A Mission Bay Rental Wave [SocketSite]
∙ Avalon At Mission Bay III (240 Berry): Now Open And The Rents [SocketSite]
Well, I told ya, don’t trust numbers put out by the developers too much. They have self interest in looking like they are in demand.
Wonder if the same thing is going on at Strata.
The prices they are asking are too high. A one bedroom should really priced more like 1600-1700 including parking. They should fill up that baby in no time if that’s the asking price.
jaja – “The prices they are asking are too high. A one bedroom should really priced more like 1600-1700 including parking. They should fill up that baby in no time if that’s the asking price.”
If they will fill up quickly at those prices then the price is too low. If demand is very high at a certain price, prices are too low. If they are reaching leasing goals then it seems like they have found an appropriate price based on what renters will pay. If leasing slows down, prices will go down, if leasing picks up prices will increase or incentives will disappear.
Have been emailing with a gal who is moving from Rincon Center to Avalon as she likes the amenities. I gather it’s young crowd going over there?
Let’s just say on avg the one bedrooms are renting for $2600. Say we have 230 of them still unrented (I know there is studios and 2 beds in between but for easy calc. sakes), Avalon is loosing close to 600k/month of rent by keeping the prices at artificially high level. But like all good businessmen, I’m sure they’ll lower the prices $50-$100 monthly till they finally hit the sweet spot. My guess is that most of the one beds will go for 1900-2000.
I was in Avalon Phase 3 over the weekend. One bedrooms were quoted from about $2200 – $3200 That includes a $100 monthly discount but does not include the one month free they are offering. These numbers do not include parking water/sewer/trash.
Yesterday I rode Caltrain to 4th/King and had an excellent view into the (covering-free) windows facing the train station. I assume these would be the less desirable units, but still it’s clear that no more than 10% of the them are rented. If you find yourself on Townsend or looking down 5th you should get a similarly good view of the occupancy status of the building. It’s quite striking.