(To read more on the multifamily market, click here.)

SAN FRANCISCO-Strong interest is being shown in One Rincon Hill, the tallest residential project in the city and one of the first to take advantage of recent legislation allowing for binding contracts to be signed when construction starts as opposed to when it is complete as had been the case. One week into the sales effort, 80% of the 376 units in the first tower have been tied up with 3% deposits that will go non-refundable when binding sales contracts are signed over the course of the next three weeks, according to the developer, Urban West Associates of La Jolla.

The two concrete and glass towers will rise 45 and 55 stories at First and Harrison streets atop Rincon Hill, next to the entrance to the Bay Bridge. The towers will stand about 115 feet apart and have a 9,800-sf footprint that will house about eight units per floor, for a total of more than 700 units. The units will range from 600 sf to 1,800 sf and sell for between $900 and $1,000 per sf, which means units will sell for between $540,000 and $1.8 million.

The first phase includes the taller of the two towers and the parking podium for both, which will be edged with town homes and topped with a pool and landscaping. Urban West principal Michael Kriozere tells GlobeSt.com the total development cost of the first phase is $290 million while the gross sell-out is estimated at about $400 million.

Urban West’s equity partner for One Rincon is CB Richard Ellis Strategic Partners Fund. Construction financing is being provided by Union Labor Life Insurance Co. and Bank of America. The architect is Solomon Cordwell Buenz & Assoc. Completion is scheduled for December 2007.

To help would-be buyers visualize their space Kriozere spent $2.5 million building out a 9,000-sf sales center in a warehouse next to the development site. The center, which opened Friday, is replete with fully appointed two-bedroom model apartments with lightboxes simulating views both night and day.

The models include 3D animation, interactive computer simulation and feature Duratrans panels simulating actual day and nighttime views from the bedroom of a unit on the 13th floor and the living room and balcony on the 42nd floor. There are also sales offices, a design center, a model kitchen and bathroom, and a scale model of the entire development.

In the first three days of pre-sales, deposits were placed on about half the 376 units in the first tower. Over the weekend, the total number of deposits crested 300. Paul Zeger, president of Pacific Marketing Assoc., tells GlobeSt.com that people are excited about the possibility of bring the first to buy on Rincon Hill, San Francisco’s last remaining hill to be developed, probably much like those who first bought on Nob Hill or Russian Hill long ago. There are no plans to keep any units off the market in order to maximize sales revenue later on in the development process, he says.

Local buyers comprised the largest number of deposits. The second highest number of deposits came from the Bay Area in general and coming in third were buyers from Southern California. In addition, a developer source tells GlobeSt.com that there also have been several instances of multiple purchases where a family or friends come in and buy at the same time.

Due to the ability to take deposits and turn them into binding contracts within a few weeks, Kriozere says he expects very few drop-outs. “San Francisco is a tiny peninsula that is topographically, historically and politically challenged for development, and thus is difficult to bring new product to market,” he says. “With One Rincon Hill, we have overcome those challenges while also developing a property of quality in an excellent location.”

There are several planned condominium projects that will be competing for early commitments. One pre-sale center is already open for a 99-unit project at 255 Berry St. Pre-sale centers set to open this spring will market the 110-unit Park Terrace and the 268-unit Arterra building, both in the Mission Bay area, and the 246-unit SoMa Grand at Mission and Seventh.

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