Transbay Terminal a Good Deal for SF

I haven’t honestly given much thought to the Transbay Terminal project that’s been talked about over the past few years. However, last week the Transbay Joint Powers Authority (TJPA) presented the latest details of the project at my company’s Market Watch meeting, and I was pretty impressed.

The project consists of three elements: replacing the outdated Transbay Terminal at First and Mission with a new center; extending Caltrain underground from its current terminal at Fourth and King to the new Center—with accommodations for high-speed rail—and creating a new neighborhood with homes, offices, a 5.4-acre park and shops that will surround the new Center.

Construction of the new Center is scheduled to kick off in 2010 and be completed in 2015. The Caltrain Downtown Rail Extension is slated to begin in 2012, with a 2018 completion date.

Costs for the project are around $4 billion, and will be funded through local, regional, state and federal sources.

The Transbay Redevelopment Plan, adopted by the city in June 2005, includes building 2,600 new homes (with 35% affordable), three million square feet of new office space, and 100,000 square feet of retail. Folsom Street will feature widened sidewalks, views of The Bay, cafes and markets.

I’m thinking this project will have big benefits for the area (though there has been some conflict around the high-speed rail and Caltrain details).

Contractor's Darling: 31 Walter

walter The best development opportunity I’ve seen recently is over at 31 Walter, in Duboce Triangle. Basically a teardown, the property is ripe for erecting a larger single-family home, and it has a garage—so you don’t need to attend a hearing to get permission to install one. With a list price of $599,000, there’s room to pay a reasonable asking price for the location, and rebuild the house.

When I saw the house last week on broker tour, haulers were clearing out all the crap that had been jammed inside for years. There was also a gaping hole in the ceiling in one bedroom, lending new meaning to the definition of skylight.

Offers due on Wednesday, so get over to 31 Walter if you want to throw your hat in the ring.

Fractional TIC Loans Thrive in San Francisco Market

I was surprised to hear recently that lender NCB recently suspended its fractional loan program. Which made me think: Are fractional loans here to stay? Are buyers risking the ultimate integrity of their multi-unit TIC ownership by assuming the individual loans will be available when they are ready to sell?

Fractional loans are apparently performing quite well, thank you, according to Sterling Bank’s Henry Jeanes. He says that Sterling is committed to offering its fractional loan product, a decision fueled by the consistent popularity of TIC interests among San Francisco buyers (particularly of the first-time variety).

Jeanes is presently seeing about five TIC loans closing per month at Sterling, and 15-20 loans closing monthly among all the lenders. Many clients he’s worked with who can afford less than, say, $800,000, are still turning to TICs, as TICs still offer more bang for the buck (especially if you’re looking for a quintessential Victorian/Edwardian flat, for example).

Jeanes expects more fractional TIC lenders to enter the market in the future; the borrowers for these loans are attractive in that they meet stringent financial requirements. (Full doc, and a minimum of 700 for a credit score, for starters.)

Lenders are also fairly careful about how many of these fractional loans they authorize. So I’m thinking that if the loans continue to perform well, there may be less of a risk such loans will ultimately disappear. Indeed, 249 TIC interests have sold so far in 2009, at an average price of $616,573.

But before you run out and start going to open houses for 3-6 unit TIC interests, do your homework. Get a sense for the details, and know what you’re getting into. TICs are not for everyone.

Livin' Large in South Park

southparkProving that South Park still shines in the San Francisco real estate world, 54 South Park closed escrow last week for $3,375,000 (listed at $3,845,000, so somebody got reasonable after 94 days of being on the market).

The 3,000+ square foot penthouse unit has two large, city-view bedrooms, three en suite bathrooms, two half baths, and three fireplaces. There’s also a large deck with Hotsprings spa and an outdoor gas fireplace. Throw in two-car parking, and you’re set. Don’t forget to invite me to the housewarming.

Historic Hotaling a Hotbed of Housing Activity

hotalingIn the shadow of the Transamerica Building, a small street located between Washington/Jackson and Sansome/Montgomery has become Jackson Square’s real estate epicenter.

25 Hotaling Place is a newly developed nine-unit property featuring eight one-bedroom condos and one two-bedroom unit. Prices range from the high $500,000s for a 1BR, through the mid-$800,000s for a 1BR/2BA with a den. Finishes are high end (teak flooring, Subzero, Wolf, Bosch—you get the picture), and I particularly liked Unit B, which had a nice tree outlook with the Transamerica Building just beyond. Though these condos don’t have a dining space, the target demographic probably won’t be eating in. No garage (though you can lease a space a couple blocks away), so 25 Hotaling is most likely looking for pied-a-terre buyers who want to be in walking distance of neighborhood amenities in an urban environment.

Just across the way is 38-40-42 Hotaling, which features a 3200-square foot condo with huge roof terrace for $3.8M. This unit has imported French oak, limestone floors, and an alcohol-burning fireplace. If you’re looking to renovate your own unit, just go downstairs to 42 Hotaling, which is a 2900-square foot shell waiting to be built out. Right now, it looks like an empty gallery space. Pony up your $1.7M and get to work.

While the 40-42 Hotaling spaces were impressive, they have absolutely no views. You have to focus on the historical nature of the property, and the large square footage.

Walk Score Winners: $900,000-$1M

Here’s another trio of properties that have high Walk Scores. Today, we check out Russian Hill, Hayes Valley, and Alamo Square.

filbert
1348 Filbert Street
Condo
Russian Hill
List Price: $995,000
2BR/1.25BA
1458 sq ft
HOAs: $166
1-car pkg
Walk Score: 91
On the market for 172 days last year at $1,129,000, 1348 Filbert is now at a more reasonable price. It’s located on a tree-lined block at Filbert and Larkin, and has lovely period detail. There’s also a remodeled kitchen with the whole Wolf range and Miele dishwasher thing going on. In-unit washer/dryer and a roof deck with pano views of the Golden Gate Bridge and Bay.

270linden
270 Linden
Condo
Hayes Valley/Van Ness Corridor
List Price: $999,000
3BR/2BA
1514 sq ft
HOAs: $308
2-car pkg
Walk Score: 98
Also on the market for about 171 days last year at a $1.2M price point, this baby has a whittled down list price and a master suite with marble bath. There’s also a wood-burning fireplace and a huge, private roof deck. Parking is stacked, but you get two spaces. Last sold in June 2007 for $1,230,000, so this is seeming like a pretty good bargain to me.

535steiner
535 Steiner
Condo
Alamo Square
List Price: $969,000
3BR/2BA
2172 sq ft
HOAs: $350
No deeded parking; leased for $350/mo.
Walk Score: 94
Though this unit doesn’t have deeded parking, it’s huge and has high-end finishes. The master bedroom has a gas fireplace and overlooks the garden, and there’s plenty of storage and a full laundry room. Location is a little busy (between Fell & Oak), but at least you’re not on those two thoroughfares.

The SoMa Cottage That Could

334harriet Though its neighboring loft buildings have sandwiched it in, 334 Harriet stands proud on its small street between Folsom and Brannan. The 820-square foot cottage was built in 1910 and has all the trappings of the era (including very small bedrooms).

And the current owner even cared enough to remodel the cottage in 2007. It has a cute garden. But it lives in the shadows of taller, shinier properties. Last sold in October 2004 for $615,000, 334 Harriet has been on the market for about a month for $699,000.

You know, if I were in the market for a quintessential Victorian, and I had about $700,000 to spend, Harriet would be a nice alternative.

TICs Avoid Foreclosure Wave

Last week, our reader The Real Estate Whisperer asked about the health of the TIC loan industry.

TICs apparently have an excellent track record when it comes to foreclosures, according to Henry Jeanes at Sterling Bank—one of the primary TIC lenders. Jeanes confirmed that apart from one TIC owner in Oakland who was heading for foreclosure (which was ultimately avoided), Jeanes isn’t aware of any lenders foreclosing on a TIC interest.

Good news, particularly with the mix of group and fractional loans. Jeanes attributes the loan success to the strict TIC loan requirements.

Sellers Add Water Work to Checklist

Anyone gearing up to sell their property needs to know about a new water conservation ordinance that went into effect over the summer.

Aimed at increasing water efficiency and overall conservation, the new law requires residential properties to be retrofitted upon resale. Here are the new requirements:
- all showerheads have maximum flow of 2.5 gpm (gallons per minute)
- showers have no more than one showerhead per valve
- faucets and faucet aerators have max flow rate of 2.2 gpm
- toilets have a max consumption of 1.6 gallons per flush
- all water leaks have been repaired.

A qualified energy and water inspector is the professional sellers will call in to survey their property and potentially make whichever changes are necessary. Sellers should also note that transferring compliance to the buyers is possible, but only if the title company holds back 1% of the purchase price in escrow. The buyers then have 180 days from the property sale to complete the work. Any unused portions of the holdback are returned to the seller after the certificate of completion is filed with the Department of Building Inspection.

There are toilet, faucet, and showerhead rebates available, so check the details prior to moving ahead with any work.

Unrealistic Sellers Withdraw from the Market

27th When I first reported on 141 27th Street in Noe Valley earlier this year, work was underway on this major fixer located behind my home. It had been purchased in the pre-stock market crash haze of August 2008 for $950,000 (list price was $637,500) by a group that planned to renovate and flip.

The renovations were surprisingly limited to working within the envelope of the building, with no vertical or horizontal additions. I was a bit skeptical that a finished product would result in the $950,000 purchase price making sense.

Indeed, after 116 days on the market at $1,595,000, the sellers of this 3BR/3BA property decided to withdraw the property in mid August.

I think the summer was the time to separate the realistic from the unrealistic. Indeed, there were 209 single-family homes, 476 condos/TICs, and 80 two- to four-unit buildings withdrawn from June through mid September. That’s a lot of properties.

I’m betting we’ll see less withdrawn and more sold properties this Fall, if only because sellers will hopefully learn from others’ misfires.

Walk Score Winners: $600-650,000

Looking for a home in a walkable, central neighborhood? Most of the prospective buyers I meet usually are. With that, I’m kicking off the Walk Score Winners series, which will spotlight trios of properties in specific price ranges and which also have high scores. I’m hoping this will be helpful to buyers who are trying to narrow down their neighborhood choices, and determining what they can get for their purchase power.

So here we go:
1701jackson

1701 Jackson #107
Pacific Heights
List Price: $599,000
1BR/1BA
741 sq ft
HOAs: $538
1-car pkg
Walk Score: 98
This is a great location for the downtown commuter who also wants an inground pool for those balmy Pac Heights evenings (not). The Polk Street strip is a few steps away, and the ambitious can simply walk downtown.

We now move a little to the west:
1521sutter

1521 Sutter #503
Lower Pacific Heights
List Price: $630,000
1BR/1BA
757 sq ft
HOAs: $331
1-car pkg
Walk Score: 98
This new construction building is in spitting distance of Japantown, and it’s a straight shot on the bus to downtown. It’s not the hippest location in the city, but it’s certainly central.

And finally, over to the Eureka Valley area:
734_14th

734 14th St. #3
Duboce Triangle
List Price: $599,000
2BR/1BA
HOAs: $235
Walk Score: 97
This one is probably the most “neighborhoody” of the bunch, with the Castro nearby and the Muni street car going in every direction just steps away. Safeway is around the block, and there’s a good selection of bars and restaurants. No parking, but there is leased parking at $200 monthly nearby.

Readers: Please Leave a Comment below–tell me which one you’d buy. And which price range would you like to see covered next?

719 Carolina and the Red Kitchen Return

carolina719 Carolina in Potrero Hill is back on the scene, after a month’s break. First listed in early June for $2,250,000, the “substantially rebuilt” 3BR/3.5BA, 3400-square foot home sat on the market for 60 days before the sellers withdrew it.

Carolina’s back, red kitchen intact…and still listed at $2,250,000. Perhaps the sellers are counting on what are perceived to be improved market conditions since the summer? No 3BR homes in Potrero have sold for more than $1,435,000 in 2009, so Carolina may continue to be a tough sell—particularly amidst a ton of new inventory expected over the next several weeks.

Capp Compound Seeks Crafty Buyer

428cappFor those yearning for an Arts & Crafts-style compound in the heart of the Mission, 428 Capp will certainly do the trick.

This two-story home with a rear carriage house sits on a 6,125 square foot lot right at Capp and 19th Street. It was last sold for $1,085,000 in October 2006, but is now listed at $1,295,000.

All the architectural trappings are there—stained glass, massive brick fireplace, and lots of woodwork. The property is being sold with plans and permits for a major remodel to both structures, and a variance to turn the carriage house into a second living space.

There’s also four-car tandem parking. I’m thinking this could be a great opportunity for some sweat equity, my friends. The front house is perfectly livable, but the idea of a compound in the sun belt sounds good to me.

No More FHA Condo “Spot Approvals”

If you’re a buyer approved for an FHA loan, your choices are somewhat limited when it comes to condo possibilities.

The FHA was okaying condo buildings on an individual basis to add to its existing list of approved properties—until recently. From this point on, there won’t be any further spot approvals. And in October, the projects on the list will be required to apply to remain on the list.

Here’s a bulk of the approved-building lineup:
900 Minnesota (Esprit Park, just approved)
4451-4455 Mission (Mission Terrace/Excelsior border)
631 Folsom (BLU)
901 Bush (downtown)
300 Berry (The Arterra, Mission Bay)
201 Harrison (Baycrest)
115 Red Rock Way (Diamond Hghts)
1839 15th St (Dolores Plaza)
43 Ora Way (Diamond Hghts)
1235 McAllister (McAllister Mews, Western Addition)
601 Alabama (Mosaica)
829 Folsom (SoMa)
750 Van Ness (Symphony Towers)
74 New Montgomery (downtown)
1160 Mission (SoMa Grand)
364/356 Carl (Parkview Commons)

So in the end, what this means for condo buyers with FHA loans is that they will be limited to purchases within the aforementioned properties only.

TIC Lender Targets Noe Valley

Word on the street is that Marin-based Circle Bank is planning to open a branch on Noe Valley’s 24th Street. The bank reportedly believes the demographics in Noe and its immediately surrounding neighborhoods are very similar to that of Marin (no shock there).

With 229 TIC interests having sold since January for an average price of $622,606, it doesn’t appear the TIC market is drying up. Circle’s fractional loan product is the go-to loan for TIC purchases in 3+ unit buildings. (Fractional loans allow TIC owners to be responsible for their own, individual loan vs. all owners sharing a loan.)

I’m betting that fellow TIC and fractional loan specialist Sterling Bank, located at Church and 24th Street, can’t be too happy about its future neighbor. What do you think, Noe neighbors?