Selling Condos in the Hottest Market
We just caught up with one of the men charged with selling the biggest condo project to break ground in PacHeights in a decade.
This week Oyster Development got started on Rockwell at Pine and Van Ness, which will have two 13-story towers with 260 residences. It's a new assignment for Polaris Pacific principal Paul Zeger, snapped this month at the groundbreaking of another project, The Pacific at 2121 Webster. The Pacific is using a new sales method: a broker advisory board devised with developer Trumark Urban. Brokers will get involved early to suggest the right product for that location, guided by the architect (Handel). When the sales gallery opens next year, buyers will be able to tweak amenities with the push of a button. Paul works day to day with the firm's other two partners, Garrett Frakes and Chris Foley.
The 53-person Polaris Pacific office recently expanded at 850 7th. A new in-house design center (above) was constructed for developer clients who don't have one of their own. He says some 57,000 people a year go through Polaris' sales galleries across its West Coast markets, and data about buyer preferences is handed off to the development community. That means tracking amenities residents want, like chef’s kitchens for entertaining, pet grooming stations and rooftop lounges with perks like fire pits, BBQs and movie-screening lawns.
In addition to The Pacific (rendered), he's also selling the 656-unit LUMINA. (The team just released a cool new video about the project.) Polaris recently sold out Marlow at Van Ness and Clay, and Linea on Market. Paul has seen a dramatic jump in condo values, to $1,300/SF. LUMINA's been well received, despite escalated pricing (in his world that's called nirvana). He calls this market the "Holy Trinity": economic growth, a desirable place everyone wants to be, and increased demand from investors who don't care about returns as much--they just want to preserve their equity. Foreign investors want to park their money in US dollars and S.F. condos are a safe way to do it.
Above, Tishman's Carl Shannon giving Bisnow a tour of LUMINA's replica residence (right down to the view). Purchasing power is great, thanks to low interest rates. These days people can lock in a two-bedroom mortgage for $3,500 a month, which is comparable to high rents. In Oakland, high-rise condos aren't there ($650-$700/SF). You need $800/SF to justify construction because of the pressure in S.F. He just came back from ULI in NY, where there's no product for under $1M. S.F. is nearing that trend.
A rendering of Rockwell, positioned at the "center of activity" and perfect for "full-time San Franciscans," Paul tells us. He tried California on for size in 1981, starting as an office broker for Prudential before moving over to residential in the late '80s. He's been selling S.F. product since--and has lived in four of the properties he's sold (now he and his wife, a big fan of sun, live in Marin). Their kids in their 20s are reaping the reward. One of his most unbelievable assignments to date: Selling out Rincon's 360 residences in two weeks in 2007--right before the market tanked. He's got some construction and development deals in progress but not on the market yet. One on his horizon is Brooklyn Basin's 3,000 units in Oakland.
His office sits three blocks from AT&T Park, and he's turned into such a big fan that he even flew out for Game 6 of the World Series (that hard-to-swallow 10-2 loss). He would have stayed for Game 7 but work was calling (so instead, he got to stare at the big poster of Bumgarner hanging in his office). A diehard friend sent him this great shot of Hunter Pence, above.