The competition for renters in this city is heating up so much that a new San Francisco apartment tower offers butler service included in the rent.
Developer Hines offers a service known as “Hello, Alfred” that provides weekly cleaning and grocery delivery services at its new 33 Tehama Street tower. The butler service is also on call to organize closets or pantries, run errands, order catering for a dinner party or score theater tickets, all for an additional fee.
“This is a whole new level of service that San Francisco has never seen,” Paul Paradis, the company’s senior managing director based in San Francisco, said. “When you live here, you don’t need a gym or private club membership. You don’t even need a car.”
San Francisco is brimming with luxury apartments, but Hines wanted to achieve “condo quality” with 33 Tehama, Paradis said. Hines developed the building with partner Invesco.
The prices are also top-of-the-market: One-bedroom apartments are priced from $3,600 to $4,600 per month, two-bedrooms for $5,375 to $6,300 per month and the eight penthouses, ranging 2,100 to 2,300 square feet, go for $15,000 to $18,000 per month. About 15 percent of the units in the building set aside at lower rents for residents earning up to 55 percent of the area median income, which would be $44,400 for a single person.
“Our strategy was to have the highest quality and service level for rental housing in San Francisco,” Paradis said.
That strategy appears to be working. Within a few months of starting leasing, renters snapped up roughly a quarter of the building’s 403 apartments.
The 35-story building, designed by Miami-based Arquitectonica, features a two-toned glass exterior. The entire top floor of the building is made up of amenities such as lounges, co-working space, a kitchen for entertaining, outdoor terraces, barbeque areas and a game room all with expansive views of the city and bay.
Meanwhile, the building’s gym rivals any full-service fitness center with top-of-the line equipment and group classes along with a spa.
During the past few years, apartment rents have skyrocketed in San Francisco by 49 percent since 2010, according to RealPage, a provider of software and data analytics for the real estate industry.
Meanwhile, developers have added more new housing in San Francisco than the city has seen in years: roughly 5,000 new homes in 2016 and 3,300 new homes in 2017, according to data from the City of San Francisco and Polaris Pacific. Like many developers of new apartments, Hines is offering a month of free rent to lure residents.
“The amount of product on the market right now is not troubling,” Paradis said. “Offering concessions for new buildings is typical.”
Even with an influx of new supply, housing demand remains robust in San Francisco and the Bay Area, and apartment vacancy in the city is less than 5 percent, he said.
Given all that, it’s no wonder Hines beefed up on amenities and luxury details in 33 Tehama.
The building sits on the south end of SoMa near Rincon Hill and the entrance to the Bay Bridge allows residents to walk to work in nearby office buildings or the Financial District north of Market or easily access freeways and public transportation.
“We like being on Tehama Street,” Paradis said. “We can be on a quiet street, but still be right in the middle of San Francisco.”
Hines started working on 33 Tehama about five years ago, when developers could find development sites at more reasonable prices, Paradis said. The company paid $50 million for the land, which had been owned by a family for several decades. The total development cost is above $160 million, according to public records.
The tower is one of several new highrises that have popped up in San Francisco within blocks of a forthcoming regional bus terminal known as the Salesforce Transit Center. The 33 Tehama site also borders the 3.5-acre Under Ramp Park that is part of the Transbay redevelopment and is slated for completion in 2020.
Hines was an early player in the 40-acre Transbay district entitling various sites including Salesforce Tower at 415 Mission St. and the terminal building. The developer is now seeking entitlements on a site known as Parcel F at 550 Howard St. Hines proposed a 61-story tower made up of 200 homes, a 220-room hotel, and 289,000 square feet of office for that site.
The company is also building MacArthur Commons, 395 apartments next to the MacArthur BART Station in Oakland that will be complete in the fall. Also in Oakland, Hines and partner Invesco have approval to build a 225-unit development with Invesco Real Estate at 2270 Broadway.
This article originally appeared in San Francisco Business Times.
https://www.bizjournals.com/sanfrancisco/news/2018/03/21/san-francisco-new-apartments-33-tehama-hines-soma.html
© American City Business Journals, 2018.
