Luxury View Condo Drops $700K Despite Bay Area TrendJanuary 4, 2021
Purchased for $5.3 million in January of 2018, the nearly 2,700-square-foot unit #39B atop the Lumina tower at 201 Folsom Street returned to the market priced at $5.998 million in October of 2019, a sale at which would have represented total appreciation of 13.2 percent since the end of 2017.
Featuring panoramic views, an “oversized open living space,” three traditional bedrooms and a fully enclosed fourth bedroom/den/office/room for zooming, and an “unbeatable South Beach location by [the] Embarcadero Waterfront,”the list price for the luxury condo was then reduced to $5.898 million last April.
Reduced to $5.754 million in May, to $5.598 million July, to $5.390 million in September, to $5.180 million in October and then to $4.995 million in November, the sale of 201 Folsom Street #39B closed escrow on December 30, 2020, with a contract price of $4.6 million or roughly $1,709 per square foot.
For those running the numbers at home, the unit’s HOA dues, which include valet parking in the building’s garage, are currently running $1,428 per month.
And once again, while $1,709 per square foot certainly isn’t “cheap,” it was 13.2 percent cheaper than in January of 2018 on a apples-to-apples basis while the index for Bay Area condo values was up 4.2 percent over the same period of time
Comments from Plugged-In Readers
The Bay Area trend is a macro trend which can’t be applied to a particular BA condo market. Especially the SOMA which seems to be the hardest hit locale in terms of condo price retention/appreciation. The reality is further drops are likely in the SOMA given the not promising future for the area. HSR is not coming, the extension of CalTran to the TTC is likely decades away – if ever. On that point, as fewer jobs are concentrated around the TTC it’s a waste of resources to extent CalTran. Put the money towards a second BART tube terminating near the SF airport. There is no reason for tech companies to be located in the SOMA and no reason for people to live there. How long before Facebook puts its 181 Fremont digs up for sublease?
What’s needed is a condo and SFH index that is broken down by the BA counties in order to get a realistic picture of the market(s) – and why this drop in price is perhaps in line with the SOMA trend but not the BA trend.
I disagree with a number of points here.
– “fewer jobs are located around the TTC” however with the Central SOMA plan along with other nearby TTC buildings in the works, it seems likely there will be more jobs there in 20 years, not less
– “there is no reason for tech companies to be located in SOMA” – SOMA has a large stock of office and industrial spaces preferred by tech startups. Transportation access is respectable there.
– “There is no reason for people to live there” – People have proven to enjoy living within cities, especially close proximity to their jobs
– “How long before Facebook subleases 181 Fremont” – FB recently signed large leases in the city of Fremont and doesn’t appear to be strongly anti-office.
I agree with you about High Speed Rail, Second Tube, and a district specific analysis.
The Central SOMA plan, especially the office/worker component, is in doubt now. There may simply not be the demand for office space in 10 years and more to warrant major development there. The 5M building on the edge of Central SOMA will soon top out with no takers for its 650K feet of space. Construction has halted on the million foot Oceanwide office tower (with only the foundation completed) with no pre-leases. The Stripe, DropBox and PG&E buildings will all be vacated – adding to the huge amount of available office space in SF. 12 million feet of space for lease/sublease in SF and, taking the historic net lease rate of about 500K since 2011, that space could take 24 years to fill up.
As to start-ups, they are finding SF less attractive. Some have left. It’s not likely SF will be the draw for stat-ups it has been.
A second BART tube connecting to Alameda/the Oakland airport from north of the SF airport needs to be a priority. The big job growth over the next 20 years on the Peninsula will not be in SF but rather SSF/Brisbane. Brisbane will see a massive 9 million foot development geared to bio-tech. Stripe is moving to SSF and Genentech recently upped its master plan for the area to almost 6 million feet of space. Tens of thousands of new jobs will be created there over the next 10 – 20 years with many workers living in the East Bay. It is why a second tube has to be given total priority over any extension of CalTran.
Why would you expect the lease rate when prices were astronomical to persist moving forward? If the space isn’t moving, they’ll drop prices and uptake will increase. Economics sorts things out pretty nicely.
Yes there is lots of office space sitting empty as companies wait for the dust to clear from the pandemic. Even if office demand lessens permanently, there *is* a market for office space. To DK’s point, prices can drop and the space will be eventually filled, perhaps by companies who can’t or won’t embrace Work from Home. The Central SOMA plan can be amended to emphasize housing more, which many people were already calling for.
The trajectory of SOMA Is very clear. It’s going from ramshackle warehouses to glistening office/residential, one building at a time. A 3-10 year blip from a [high] survival rate virus which already has a vaccine ready is just that, a blip on a 50 year macro growth trend.
I think we need to keep things in perspective. I highly doubt someone in a 5m condo owns a private jet, but I highly doubt they fly commercial. Probably spend $250,000 just on traveling to the vacation spots. 5k an hour charter and probably 50 hours a year. They live in a different league and spend money differently. I used to work at a high end car dealership. You could offer them a used 6 months old Bentley for 100k off with only 1,000 miles. They would pass and insist on brand new. They would trade the car in with only a couple thousand miles after a year and buy another. This pandemic has only increased the net worth of the really really wealthy. Net worth goes up 10m and take a 1m loss on the condo. Rich get richer. Not jealous but envious, good for them.
At the same time, down around the million dollar mark: Luxury One-Bedroom Marked to Market, Down Over $200K.
And for (a) two: Another Luxury Two-Bedroom Slips Below Its 2016 Price.
You are 100% correct. People who are willing to spend $5M on a condo like this one probably do NOT have future appreciation in mind, at least not front and center…
“good for them”?
Wow, I don’t want to get into Two Beers territory here, but I can’t even fathom cheerleading the wealthy acquiring even more wealth during a pandemic when millions have been laid off and/or evicted. Have a little perspective, please.
I know wealth is a touchy subject. let me phase it a different way. Covid19 is a dangerous virus. It is especially dangerous if you have have pre exiting conditions or are obese. Those that came into this pandemic in good health (either by lucky Gene’s or diet and exercise) good for them.
even worse take. healthy young people do get sick from covid and some of them die. some of them will have long lasting effects. stop spreading false propaganda
so what’s the takeaway from this insight regarding how rich people supposedly think?
Nobody who has had to work hard to earn their money will spend it this way. These are very likely to be owned by the nouveau riche — children of inflation economy who came into easy/free money afflicted with the problem of more money than brains.
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