SF New Developments

East Bay Business Times - April 18, 2003

by Katherine Conrad

Penthouses in the newly built Sierra residential project in Jack London Square are selling for $725,000 - a previously unheard price for downtown Oakland and a sign that the East Bay”s largest city is coming of age. For downtown Oakland, that price point was unthinkable 10 years ago, or even five. But today, the penthouses are selling briskly in an area that is shedding its image as a warehouse district and slowly transforming itself into a waterfront enclave of lofts, apartments and high-end condos. “The Sierra is really important,” said Daniel Vanderpriem, Oakland”s redevelopment manager. “We”re doing quite well in constructing affordable housing and we”re doing well in moderate ranges. (The Sierra) shows that we”re coming of age in the downtown and the Jack London area.” Crescent Heights, headquartered in Miami and developer of the $100 million, 219-unit condominium project on Oak Street, already has sold 19 of the 34 penthouses.

Sales director Jim Jacobson said interest remains high and he expects the remaining units, which start at about $350,000, to sell quickly once the building is complete May 15. “I think there”s a lot of momentum in Jack London Square,” Jacobson said. “When we first opened our doors, we were selling one penthouse every three or four weeks. And we scratched our heads and wondered if they were at too high a price. As momentum built, we started selling two every other week. Now we”re at two a week.” Jacobson said he believes prices in San Francisco are at the top of the market, whereas there”s still plenty of appreciation occurring in the East Bay. “Prices have gone up 5 percent across the board, and we”re anticipating another 5 percent increase once the building is up and running and operating. It”s just a little more inviting then,” he said.
The Sierra is well on its way to a happy ending, but Oakland city officials weren”t always so sure. Fifteen months ago, the project - begun by C.O.D. Builders - was at a standstill for lack of funding when Bruce Menin, principal developer of Crescent Heights, stepped in. “We”re the guys making it happen,” Menin said. “Jack London Square is in the middle of a major urban renaissance. This is a cool urban environment.” Menin is certain that Jack London Square is ready for a luxury condominium project that offers residents round-the-clock concierge service, a state-of-the-art fitness center, outdoor pool with sauna, and units that feature hardwood floors, granite countertops and stainless steel appliances.

Menin has made it his business to seek out “cool urban environments” and his company is known for developing high-density residential projects in New York, Boston, Atlanta and Dallas. The developer, who considers himself a student of urban revitalization, said Crescent Heights is not afraid to be the first in an urban area not known for luxury residential developments. “This project, in a way, is a first. It was a blank lot,” he said. “Other developers have pioneered lofts, but the Sierra is the first to bring in such amenities as 24-hour concierge service. You don”t get that in the converted lofts nearby; they”re buzzer buildings. This is a different concept.

Technically speaking, other residential developers have bragging rights as being the first to go into Jack London Square. Since Mayor Jerry Brown issued his 10,000 new housing units challenge in 1999, the 21-unit Phoenix Lofts, 310-unit Allegro and 282-unit Landing all have been built near Jack London Square. But none of these projects offer the level of service available at the Sierra. For that, buyers had to head over the bridge into San Francisco. Vanderpriem mentioned the Essex, a 270-unit complex on Lake Merritt that opened a year ago, as being comparable to the Sierra. But the Essex does not offer luxury units for sale, only for rent. Buying a piece of Oakland real estate sends a strong message to everyone in the financial, development and political communities that the city is evolving. What”s more, Oakland city officials believe the Sierra will lure other high-end residential condominium projects and help attract the ever-elusive retail component so lacking in the city. “Now that there”s units for sale at that price point, it makes it easier for other developers to secure financing for like projects,” Vanderpriem said.

Reach Conrad at kconrad@bizjournals.com or 925-598-1427.