SF New Developments

More than 700 new units turn Rincon Hill into housing hotbed

San Francisco Business Times -

by Adam Feuerstein

Business Times Staff Writer

A spate of big apartment projects is turning Rincon Hill into San Francisco’s next residential mecca.

More than 700 new housing units are either under construction or in the planning stages for the nascent waterfront neighborhood that stretches from the Bay Bridge north to Folsom street. Builders have zeroed in on Rincon Hill because it is one of the last areas of the city with land and zoning required for high-density residential development:

• Last week, San Jose-based Bay Apartment Communities announced plans to develop a twin-tower, 220-unit rental apartment complex at 388 Beale St. between Folsom and Harrison streets.

• Wilson Wells Development of San Diego expects to receive final approvals next month for a 216-unit rental project on the northwest corner of Beale and Bryant streets, at the base of the Bay Bridge anchorage.

• The second phase of the Portside condominiums is under construction and is scheduled for occupancy in the fall. The for-sale project, located at 403 Main St., contains 158 one- two- and three-bedroom units.

These projects are banking on the same degree of success enjoyed by Mike and Jon Reynolds, two developers who recently completed the renovation of a building at the corner of Beale and Folsom streets into 59 luxury rental lofts. All but one unit in the Embarcadero Lofts have been leased at rents as high as $6,000 per month.

“Apartments in this area have Bay and city views,” said Mike Reynolds. “The weather is great, and we are only a few minutes walk from the financial district. All the ingredients are here for a truly vibrant residential neighborhood.”

Residential real estate marketing expert Paul Zeger says the new construction under way in Rincon Hill is linked in part to the ongoing success of South Beach, the neighborhood directly to the south that includes Bayside Village and South Beach apartments. Developers are also cashing in on years of pent-up consumer demand and rising rents and sale prices.

“There’s enough demand in San Francisco to absorb nearly 2,000 housing units a year, but only a small fraction of that number is being produced,” he said. “The housing market still has several more years to go before it even catches up with demand.”

High demand means high prices. As president of Pacific Marketing Associates, Zeger is in charge of sales at Portside II, which is being developed by Emerald Fund. Condo units in the new development will likely fetch prices between $200,000 and $550,000. Lofts at the recently completed Oriental Warehouse sold for as much as $425,000.

On the rental side, the only remaining unit at Embarcadero Lofts, a two-bedroom, 2,400-square-foot duplex unit, will set a renter back $3,500 a month. Typical apartment prices in the area range from $1,600 for a one-bedroom unit to $2,500 for a two-bedroom apartment.

Long-range city plans call for the construction of more than 5,000 residential units in the Rincon Hill/South Beach area over the next 20 years. That’s a lot of construction by San Francisco standards, but Reynolds believes it’s possible.

“We’re finally seeing a critical mass of permanent residents mixed in with successful retail stores and restaurants,” he said. “All we’re missing is a major grocery store and we’re working on that.”