Dive Brief:
- Fueled by wealthy residents, global investors and the region's generous supply of tech millionaires and billionaires, the San Francisco condo market is offering buyers a step up from the luxury market: ultra luxury, according to the San Francisco Business Times.
- On one of the last waterfront parcels available for development, Chicago-based John Buck Co., New York's Paramount Group and an affiliate of Chinese company SRE Group Limited are building the $300 million, Skidmore, Owings & Merrill-designed One Steuart Lane. Units are expected to fetch $2,500 per square foot, which is double the price of the city's existing luxury stock. Presales should start in 2020 in advance of a 2021 completion. Garnering even a higher price are homes at 181 Fremont, where "the highest residences in the city," with the upscale finishes to match, are going for $5,000 per square foot, with penthouses expected to sell for even more.
- Wealthy buyers, who can afford to buy in London or New York and are very selective when it comes to choosing a residence, are increasingly looking to San Francisco; therefore, the demand for ultra-luxury homes is rising. Other such projects include the $1.6 billion, dual-tower Oceanside Center and a new $400 million offering from Millennium Partners, a 43-story condo tower at 706 Mission St., which will feature 146 units and the 60,000-square-foot Mexican Museum.
Dive Insight:
Another Millennium property in San Francisco, the Millennium Tower, was also billed as an ultra-luxe property, but the fact that it is sinking, leaning and could have fire safety issues has taken priority over any amenities or lavish design elements it might have. So far, the building has sunk about 17 inches and tilted approximately 14 inches since construction wrapped up in 2008.
There could be a fix on the horizon, although it has an estimated cost of $500 million. Engineers have come up with a way to stabilize the building that would involve installing piers on one side, allowing the other side to sink until it's level — then installing piers under the rest of the building. The new piers would be anchored in bedrock, unlike the current piers, which were driven into clay and mud. Soil tests were scheduled to be carried out this summer, but there are still unresolved questions about who will pay for the multimillion-dollar undertaking.
In addition to the structural issues, an inspection meant to uncover the source of bad odors in the building revealed that the leaning and sinking are likely causes of gaps that have developed between the curtain wall and main structure. These gaps could create a path for fire and smoke, a condition that led city inspectors to issue a fire safety risk violation citation for the building.
