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SAN FRANCISCO-Millennium Partners late last month revealed a 15% across-the-board price cut at Millennium Tower, a 60-story luxury residential tower in Downtown San Francisco that is on track to open in mid-April. The New York-based developer’s managing partner Richard Baumert says the goal is to boost sales while also ensuring that early adopters of the $500-million project will not be penalized for buying during better economic conditions.

“To ensure the continued success of our project and protect the investment of our buyers, we have determined that the appropriate thing to do is to provide the price adjustment both retroactively to our owners who have already executed their contracts as well as to our current prospects and future buyers,” Baumert said.

The project is currently 25% pre-sold. Baumert says extending the offer to existing owners has also been met with a combination of delight and surprise while the $2-million Millennium Tower sales office at 450 Mission has seen a significant upturn in visitor volume, with seven new buyers having entered into contract, including one woman who has agreed to acquire one of the penthouses on the top two floors. The announcement did not include an update on unit sales and Baumert was not immediately available Thursday for comment.

In June, Baumert told GlobeSt.com that overall sales for Millennium Tower had topped $200 million at that his goal was to have that total up to $250 to $300 million by the time the building opens so he may “pay down the construction loan.” The longer-term goal is to have all the units sold by late 2011. At the time, the total project cost was $500 million, including $350 million for construction, and the gross sell-out value was north of $900 million.

Millennium, which previously developed the Four Seasons Hotel & Residences at 735 Market, is developing Millennium Tower at 301 Mission St. with equity partners Morgan Stanley and a local investor group in San Francisco called WTR that has ties back to Hong Kong. Designed by Glenn Rescalvo of Handel Architects, the 645-foot tower and an adjacent 11-story mid-rise building will comprise a total of 419 residences, including one, two and three-bedroom units ranging in size from 750 square feet to 6,000 square feet. The units are divided in the three strata–Residences (lower floors, main tower), City Residences (mid-rise building) and Grand Residences (upper floors, main tower)–each of which has its own lobby, elevators and staff.

Amenities will include a private concierge and exclusive access to a 20,000-sf Club Level featuring an owners’ lounge, tasting room and cellar, private dining room–serviced by the on-site restaurant– screening room, children’s playroom, an outdoor terrace, and a 5,500-sf fitness center complete with Pilates and yoga studios, massage therapy, locker rooms, Jacuzzi and steam rooms, as well as a 75-foot, indoor, competition-length lap pool set beneath a soaring skylight. The development also will have 7,800 square feet of street-level retail for two occupants, one of which will be “an upscale dining establishment under the direction of one of the city’s outstanding chefs.”

In June, the asking prices for units ranged from $700,000 to well more than $10 million, with the overall average price per square-foot coming in at around $1,500. Baumert said most of the sales to date had been higher-end units. Four penthouses on the top two floors that will be fully finished sold for an average price of $1,900 per square foot, he said. One of the 4,000-square-foot, unfinished penthouses on the top two floors sold for $2,288 per square foot. The penthouse deal from last week was reportedly $10.2 million for 5,555 square feet, which works out to $1,836 per square foot.

“There are a lot of interested people but no sense of urgency right now; since they can’t move in tomorrow, there’s no rush,” Baumert said in June. “I think as the [economic] news gets better, that will be one good push [for sales] and once the building opens we will get a big pop.”

The last time Millennium Partners opened a high-rise condominium tower into a down market in San Francisco, things turned out just fine, Baumert says. That was the Four Seasons Hotel & Residences, which opened in 2001. Pre-sales were brisk in 2000 and the 136 units were completely sold out when the dot-com crash and 9/11 rolled around.

“We lost a good amount of contracts but ended up selling out 18 months later at a little more than $1,100 per square-foot,” Baumert says. “That same product, six years later, is approaching $2,000 per square foot if you are fast enough to grab one when they come up for resale. It was a rough neighborhood but now it’s changed. The Ritz Carlton is across the street and the St. Regis is around the corner.”

The four-year sales schedule for Millennium Tower is expected to give the market time to absorb not only Millennium Tower but the two other high-rise residential towers that opened in 2008, One Rincon Hill and Infinity.

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