Fully Entitled Mixed-Use Project Launches
Due for completion in 2021, the property will include two 12-story buildings connected by a concrete corridor that will house 109 condominium units above a ground-floor lobby and 5,010 square feet of retail.
SAN FRANCISCO—The adage in real estate has always been location, location, location but for the Bay Area and specifically, San Francisco, that mantra is giving way to housing, housing, housing. Fortunately, another condo development is underway, which eases demand ever so slightly.
1554 Market Street is a fully entitled project near the intersection of Market Street and Van Ness Avenue and directly across from the Van Ness Muni metro station in the Hub District. Due for completion in 2021, the mixed-use property will encompass two 12-story buildings connected by a concrete corridor that will house 109 condominium units above a ground-floor lobby, 5,010 square feet of retail space and a 28-space subterranean parking garage.
JLL arranged $76.8 million in financing for the development of the 109-unit condominium project. The firm worked on behalf of the borrower, Z&L Properties Inc., to place the five-year floating-rate construction loan with Barings on behalf of one of its managed accounts. The JLL Capital Markets team representing the borrower included senior director Brandon Roth and senior managing director Charles Halladay.
“The San Francisco condo market continues to be strong with record pricing achieved in the second quarter of 2019,” Roth said. “Lenders recognize that a severe housing shortage combined with employment growth and IPOs from Uber, Lyft, Pinterest and others will lead to sustained demand from new buyers.”
The transit-oriented development’s prime location has earned it a Walk Score of 99, a Transit Score of 100 and Bike Score of 99, and positions it within eight blocks of more than 400 restaurants and bars.
Indeed, new construction inventory fell to 559 units on the market at the end of April, the fewest available since September 2018. More than 75% of the units in actively selling projects are in contract or closed, according to Compass Development. Consequently, buyers have a relatively limited menu of new offerings from which to choose.
As of July 1, JLL’s acquisition of HFF was official. Roth points to the combined JLL and HFF transactions during a two-year time period.
“Since 2017, the JLL San Francisco team has closed 54 development transactions,” Roth tells GlobeSt.com. “In addition, we have 24 active development assignments that are either in the process of closing or in marketing.