Approved for the development of affordable senior housing over a decade ago, neither the financing nor permits for a five-story building to rise on the Tenderloin parking lot at 430 Eddy Street were secured and the entitlements to build were cancelled and lost.
Two years ago the un-entitled parcel sold for $1.6 million.
Two months ago the City approved plans for an eight-story, market-rate building with 23 sub 500 square-foot residential units to rise on the site, along with a 970-square-foot retail space and a ground-floor room for the storage of 24 bikes.
And yesterday, the “Fully Entitled!” 430 Eddy Street site returned to the market listed for $5 million or roughly $220K per entitled unit in the Tenderloin, which is around the price per unit that developers have been paying for luxury sites around the city.
Perfect infill. Love it.
This is a really well done design – kudos to the architects.
It respects the context of the surrounding buildings. It fits in with those buildings and is not a jarring departure from them as often happens with these SF infills. The proposed Tenderloin garage development for instance.
No Bay windows – three cheers! The cornice at the top picks up on the cornices of the neighboring buildings. The colors and materials don’t stand out and say “look at me” but nicely pick up on the color scheme and materials of the block. The brown frames and separations of the lower windows are made more dramatic by the matching brown façade of the top floor.
Even though this will be the tallest building on the block, the existing varied heights around it make its height totally appropriate. The block is more interesting visually, IMO, than it would be with a string of just 3 story buildings.
This is clearly a modern design but not in a way that will make it dated in a decade.
Quite a handsome building.
5 Million sounds pretty steep for a vacant lot on a pretty sketchy street. I wonder what the construction loan would look like on something like this.
I am thinking the math looks something like this (feel free to correct me):
23 units * $3250 = $897,000 Annual Gross Income
Expense ratio @ 35% =$313,950
Rough net income = $583,050
Assuming a build out cost of $450 a sqft = Roughly 6,000,000
Add the original cost of 5,000,000 = 11,000,000
Cap Rate = 5.3% . Ouch
If anyone can do the above with a financing option, that would be cool!
It doesn’t seem to pencil out at this price. Was the plan of the group who bought and entitled it to “flip” the entitlement all along? Entitling property in California and selling to a developer rather than building can be more lucrative and less risky than building.
Perhaps they have set the price high but expect to lower it?
The Sutro Hills project was entitled and put on the market 9 or so months ago by the original developer. As far as I know that entitled project has yet to sell. And it is in a very nice area.
Good luck on getting 5 million for this lot.
UPDATE: Price for Approved Development Site in the Tenderloin Is Cut